Benzinga | May 12, 2021 05:56AM EDT

Court Filings Show Defense Department Removes Xiaomi From Blacklist

* The U.S Department of Defense has agreed to remove the Chinese smartphone company Xiaomi Corp's (OTC: XIACF) blacklisting, bringing an end to their ongoing tussle, Reuters reports.

* The Court filing stated that both parties would resolve litigation without a further contest.

* The parties were negotiating over specific terms and will file a separate joint proposal before May 20, Bloomberg reports.

* The former Donald Trump administration had banned Xiaomi earlier this year over alleged military ties along with seven other Chinese companies, including a restriction on U.S. investments in the company.

* Trump's November order prohibited American investment in Chinese firms owned or controlled by the military.

* Xiaomi retaliated with a lawsuit denying its Chinese military connections and won the court ruling over the investment restrictions.

* The blacklisting enforcement was temporarily blocked in March by a federal judge under the President Joe Biden administration, considering the ban as "deeply flawed."

* Reuters notes that other Chinese firms were also contemplating similar lawsuits after Xiaomi's victory.

* Trump's order also targeted TikTok owner ByteDance Ltd and WeChat owner Tencent Holdings Ltd (OTC: TCEHY). Huawei Technologies Co was prohibited from buying American-made components and banned from global infrastructure projects.

* Interestingly, Biden also extended a 2019 executive order this week, excluding the U.S. companies from using telecommunications equipment manufactured by firms like Huawei over national security risk concerns.

* Congress also remains focused on bipartisan legislation to oppose China and bolster the U.S. position in technology and critical manufacturing.

* Price action: XIACF shares closed lower by 1.9% at $3.1 on Tuesday.