Smartphone giant Xiaomi Corp. became the latest Chinese technology group to be targeted by the Trump administration, with its surprise addition to a U.S. investment blacklist sending its shares sharply lower.
The addition of Xiaomi wrong-footed analysts and investors. Xiaomi, a consumer electronics company that focuses on mobile phones and household appliances, had managed to avoid U.S. pressure even as Washington tightened the screws on Chinese tech groups including Huawei Technologies Co., seeking to curb their access to American technology and funding.
Xiaomi’s stock has more than doubled in the past 12 months and the company has been rapidly gaining market share. In the third quarter of 2020, it overtook Apple Inc. to become the world’s third-largest smartphone maker, according to Gartner .
On Thursday, the U.S. Department of Defense added Xiaomi to a list of companies it says support China’s military. Under the terms of an executive order issued by President Trump, the designation means that after 60 days, U.S. investors won’t be able to buy Xiaomi stock, and they have a year to sell existing holdings.
Xiaomi’s Hong Kong-listed shares fell almost 14% Friday before closing 10% lower.
