Smartphone and electronics maker Xiaomi Corp recorded a significant drop in stock prices during today's trading session, after US President Donald Trump's administration blacklisted Xiaomi for allegedly having ties to the Chinese military.
According to CNBC Indonesia, the situation caused the Beijing-based company share price to drop by 9.19% at the opening of today's trading session on the Hong Kong Stock Exchange.
According to Counterpoint Research, Xiaomi is the third largest smartphone manufacturer in the world in the third quarter of 2020.
Xiaomi is now subject to an executive order announced by Trump last November, which barred U.S. investors from buying shares or securities from companies allegedly linked to the Chinese military.
Investors are also forced to give up or sell their stock interests from blacklisted Chinese firms.
Xiaomi has yet to comment further on the matter.
The company is one of nine entities allegedly involved in the Chinese military.
Earlier, Chinese aircraft manufacturing firm Comac as well as giant technology companies such as Huawei were also blacklisted.
As previously reported, there are no signs that trade relations between the US and China will escalate despite Trump being replaced by Joe Biden on January 20.
Yesterday, the US increased sanctions on Chinese firms for their actions in the disputed territory, the South China Sea. In fact, the US has imposed investment bans on nine Chinese companies.
According to an AFP report, the US Department of Commerce has officially placed the Chinese oil company CNOOC on the investment 'blacklist'.
Meanwhile, the U.S. Department of State has limited visas to company executives as well as a number of Chinese government and military officials.
"China's reckless and aggressive actions in the South China Sea and its aggressive behavior to acquire intellectual property and technology sensitive to its military capabilities pose a threat to U.S. national security and international security," said Trade Secretary Wilbur Ross.
