Smartphone giant Xiaomi Corp. it has become the latest Chinese technology group to be targeted by the Trump administration, with its surprising addition to the U.S. investment blacklist, causing its shares to plummet.
The addition of Xiaomi’s mistaken analysts and investors. Xiaomi, a consumer electronics company focused on cell phones and home appliances, managed to avoid U.S. pressure even as Washington tightened the screws on Chinese technology groups, including Huawei Technologies Co., which sought to restrict their access to technology and American financing.
Xiaomi’s shares have more than doubled in the past 12 months and the company has been gaining market share quickly. In the third quarter of 2020, it overtook Apple Inc. to become the third largest smartphone maker in the world, according to Gartner.
On Thursday, the United States Department of Defense added Xiaomi to a list of companies it claims to support China’s military. Under the terms of an executive order issued by President Trump, the designation means that after 60 days, American investors will not be able to buy Xiaomi shares and will have one year to sell existing shares.
Hong Kong-listed Xiaomi shares fell nearly 14% on Friday, before closing with a 10% drop.