Prior to the injunction, US companies were set to be banned from purchasing publicly traded Xiaomi securities or derivatives of those securities from this week.
A US federal court has temporarily blocked the Department of Defense from placing restrictions on the ability for domestic companies to invest in Xiaomi. The presiding judge, District Judge Rudolph Contreras, issued an initial injunction [PDF] over the weekend to temporarily stop Xiaomi from being added to the Communist Chinese military companies (CCMC) list. Companies placed on the CCMC list are subject to a Donald Trump executive order that came into force in November last year. The executive order prohibits US persons from trading and investing in any of the listed companies and bans trading in any new companies once the US has placed the CCMC label on them. The injunction was handed out as the judge found that Xiaomi was likely to suffer « irreparable harm » in the absence of the relief. In making his decision, Contreras explained that the factors of Xiaomi’s stock price dropping by 9.5% since the CCMC designation, various banks including Morgan Stanley, JP Morgan Chase, and Goldman Sachs suspending trading of Xiaomi shares, and the company losing contracts around the world, when viewed together, indicated the company had already suffered « irreparable harm » as a result of the designation.
