Xiaomi is challenging the US Defense and Treasury Departments’s ban against them

The tensions between the US and China don’t look like they are dying down anytime soon, and in the process, several Chinese tech companies like Huawei, ZTE, and Xiaomi are finding themselves caught in the crossfire.

With Xiaomi, the company is facing what is known as an investment ban. This basically means that companies on this list are no longer allowed to be invested in by US investors, and those who do hold investments will have to divest them within a specific time. Now it looks like Xiaomi is challenging that ban.

In a legal complaint filed with the US courts against the US Defense and Treasury Department, Xiaomi is calling the ban “unlawful and unconstitutional”. It also denies that they are controlled by the People’s Liberation army, which was the initial allegations made against the company where it was claimed that Xiaomi has ties with the Chinese military.

Xiaomi claims that should this ban go into effect in March, it would cause “immediate and irreparable harm” to them. According to Xiaomi:

“The company’s strategic relationships with U.S. financial institutions – critical for Xiaomi to continue to access the capital it needs to continue to grow in a highly competitive market – will be significantly damaged.

Moreover, the public association of Xiaomi with the Chinese military will significantly impair the company’s standing with business partners and consumers, causing reputational harms that cannot be readily quantified or easily repaired.”

Xiaomi isn’t the only Chinese company facing pushback against their attempts to do business in the US. Others, such as Huawei and ZTE have faced similar problems, to the extent that Huawei had to sell off its Honor brand.

Source: Reuters