A federal judge prevented the U.S. Department of Defense from placing restrictions on Chinese smartphone maker Xiaomi, which were due to take effect next week.
Just before ex-President Trump stepped down in January, the DoD designated Xiaomi as a “Chinese communist military company”, making it subject to Trump’s executive order that banned the U.S. from investing in such companies. But on Friday, US District Judge Rudolph Contreras issued a preliminary injunction to avoid what he called “irreparable damage” to Xiaomi, saying the designation was “arbitrary and capricious”.
Xiaomi said in lawsuits it would suffer “extreme and irreversible damage” to its business and reputation if the restrictions came into force, and said it operates “in accordance with the relevant laws and regulations of the jurisdictions where it conducts its business”. A company spokesman said The Verge in January, Xiaomi “does not belong to, nor is controlled by or affiliated with the Chinese military and is not a ‘Chinese Communist Military Company’”.
In his decision on Friday, Contreras questioned the Trump administration’s argument that “Chinese civilian companies” like Xiaomi allow the Chinese government to “directly threaten the homeland of the United States”.
“The court is somewhat skeptical that important national security interests are really involved here,” wrote the judge.
Xiaomi said in a statement that it will continue to request that the CCMC designation be removed permanently.