GUANGZHOU, China — Shares of Xiaomi jumped Monday after a U.S. judge temporarily blocked a move by former President Donald Trump’s administration to bar Americans from investing in the Chinese smartphone maker.
Shares of Xiaomi surged more than 10% in early trade, but have since pared their gains. The stock was still up about 8% in early afternoon trade.
In January, the Trump administration designated Xiaomi as one of several “Communist Chinese military companies” or CCMC.
This meant the world’s third-largest smartphone maker was subject to a November executive order restricting American investors from buying shares or related securities of any companies given this designation by the U.S. Department of Defense.
Xiaomi said at the time that it was “not owned, controlled or affiliated with the Chinese military” and subsequently filed a lawsuit to overturn the designation and stop the investment ban.
In a Friday ruling, U.S. district judge Rudolph Contreras granted Xiaomi a preliminary injunction against the Trump-era order. The judge said that without relief, Xiaomi would “suffer irreparable harm in the form of serious reputational and unrecoverable economic injuries.”
Contreras wrote there is “plainly a lack of substantial evidence to adequately support a finding that Xiaomi is a CCMC.”
Xiaomi said it was “pleased” with the ruling and said it will “continue to request that the court declare the designation unlawful and to permanently remove the designation.”
“Xiaomi reiterates that it is a widely held, publicly traded, independently managed corporation that offers consumer electronics products solely for civilian and commercial use,” the company said in a statement on Saturday.
“Xiaomi believes that the decisions of designating it as a Chinese Communist Military Company are arbitrary and capricious, and the judge agrees with it.”