Customers wait in line at Xiaomi’s flagship store in Mong Kok, Hong Kong.
Miguel Candela | SOPA images | LightRocket | Getty Images
In response, Xiaomi filed a lawsuit on Friday against the US treasury and defense departments in the district court of Columbia, according to its investor relations website on Sunday.
Xiaomi claimed that the Chinese military designation is “unconstitutional because it deprives Xiaomi of its freedom and property rights without due process” and therefore violates the Fifth Amendment to the United States Constitution.
The Chinese company also said that a ban on investors from buying shares will cause “irreparable damage”
“By cutting Xiaomi out of the US capital markets, the Designation and related restrictions will impair the company’s ability to conduct, expand and finance its business, sell its products, maintain and increase its business relationships and recruit and retain employees,” the company file said.
Xiaomi’s shares rose 1.2% in Hong Kong trading at 11:46 am HK / SIN time.
The company also said that “it is not owned or controlled by, or otherwise affiliated with the Chinese government or military, or owned or controlled by any entity affiliated with the Chinese defense industrial base.”
Xiaomi said that any Chinese government or military entity does not have the ability to “exercise control over the company’s management or business”.
Huawei, which was a target of the Trump administration, also tried to use the United States’ legal system to overturn Washington’s actions.
In March 2019, Huawei sued the United States over a law that prohibited government agencies from buying equipment from the Chinese tech giant. That action was dismissed by a federal judge last year.