Chinese companies targeted by a sweeping investment ban imposed by former President Donald Trump are considering suing the US government after a federal judge suspended a similar blacklisting for Beijing-based smartphone maker Xiaomi.
Lawyers familiar with the matter said some of the banned Chinese companies are in talks with law firms including Steptoe & Johnson and Hogan Lovells, emboldened by US District Judge Rudolph Contreras’ preliminary order halting Xiaomi’s inclusion on a US list of alleged Communist Chinese military companies that are subject to an investment ban.
The Trump administration’s move to blacklist Xiaomi Corp, which knocked $10 billion off its market share and sent its shares down 9.5 percent in January, would have forced investors to completely divest their stakes in the company.
“Companies are reaching out to lawyers to challenge the listings and the grounds for the listings,” said Wendy Wysong, managing partner of the Hong Kong office of Steptoe & Johnson, a worldwide law firm headquartered in Washington.
Wysong and a person familiar with Hogan Lovells, another global law firm, declined to name the companies involved in discussions.
Contreras flagged the U.S. government’s “deeply flawed” process for including the company in the investment ban, based on just two key criteria: its development of 5G technology and artificial intelligence, which the Defense Department alleges are “essential to modern military operations,” and an award given to Xiaomi founder and Chief Executive Lei Jun from an organization said to help the Chinese government eliminate barriers between commercial and military sectors.