Chinese Military Firms Challenge Pentagon to Reverse Trump’s Investment Ban

WASHINGTON—A Chinese smartphone maker won a key legal victory against the U.S. government this spring, which is expected to embolden more Chinese companies with military ties to challenge a Trump-era ban that prohibited U.S. investors from investing in their firms. The Department of Defense in May officially removed China’s Xiaomi, the world’s third-largest smartphone vendor, from its investment blacklist. Xiaomi was among the 44 companies labeled as “Communist Chinese military companies” (CCMCs) by the Pentagon. The Defense Department under the Trump administration had designated the company as having ties to China’s military on Jan. 14. In response, Xiaomi filed a lawsuit against the U.S. government in the District Court for the District of Columbia, calling its placement “unlawful and unconstitutional.” In March, U.S. District Judge Rudolph Contreras ordered a temporary halt to the enforcement of the blacklisting, citing a lack of “substantial evidence” about the company’s ties to the People’s Liberation Army (PLA). …