A win for Chinese company Xiaomi has others looking to litigate against the American government to get out from under attempted blacklisting that happened under Trump’s White House.
The Xiaomi company reportedly lost around $10 billion of market share, and saw stocks slumped almost 10% after its designation as a blacklisted company based on criteria that the firm’s counsel has called “deeply flawed.”
Now a judge ruling earlier this month has agreed, noting that the vague references to national security related to 5G don’t gel with the market reality that 5G is becoming the norm in consumer electronics.
All of that should be evident, but there are many other signs that the private sector just doesn’t like protectionism.
We previously reported several times on the reaction of American chip-making firms to U.S. government blacklisting of Chinese suppliers – these companies went to their lawyers. Now Chinese companies, including semiconductor manufacturing firm SMIC, are going to their lawyers as well.
Meanwhile TikTok, which faced a ban on its social media operations stateside, is allegedly pursuing a group chat function that looks like the popular Clubhouse technology. That looks like a win for the embattled ByteDance, the maker of the platform, which was also the target of a ban under Trump.
Also, don’t look now, but we’re in the midst of a profound semiconductor chip shortage that SMIC probably could have helped the world to conquer. But it was just another domino in the chain, a casualty of economic isolation that now seems profoundly misguided.
On Xiaomi, Justice isn’t talking.
“A spokeswoman for the U.S. Department of Justice, which is defending the case, declined to comment,” write Karen Freifeld and Alexandra Alper for Reuters today. “A spokeswoman for the Department of Defense referred questions to the White House, which has not responded.”
Whether the world can get beyond the current chip shortage, which is affecting auto manufacturing and other sectors, will be part of our look back to the days when U.S. politicians could bash China with impunity. As we go forward, cooperation will be the name of the game.
