Smartphone manufacturer Xiaomi, based in China, has recently been included on a military blacklist created by the Trump administration. The Department of Defense announced on Thursday the addition of nine businesses to its roster of companies alleged to have ties to the Chinese military, with Xiaomi being among them.

As of the third quarter of the previous year, Xiaomi held the position of the world’s third-largest smartphone vendor, surpassing Apple in market share while remaining behind both Samsung and Huawei, as reported by the research firm IDC.

President Donald Trump enacted an executive order in November, scheduled to go into effect in January, prohibiting investment in companies identified as supporting China’s military, intelligence, and security efforts. Several entities are included on this list, such as Huawei, China’s leading chip manufacturer SMIC, and the nation’s three largest telecommunications providers.

It’s important to note that this military blacklist differs from the Commerce Department’s entity list, which previously restricted Huawei, DJI, SenseTime, and other Chinese technology companies from accessing U.S. suppliers due to national security considerations.

According to a statement released by a Xiaomi spokesperson, the company “reaffirms that it has no ownership, control, or affiliation with the Chinese military, and does not qualify as a ‘Communist Chinese Military Company’ as defined by the NDAA [National Defense Authorization Act].” The spokesperson further stated that Xiaomi will pursue all available options to safeguard the interests of the company and its investors.

Similar to the effects of the entity list, the U.S. government’s military blacklist has created uncertainty regarding compliance. Following sanctions against China Mobile, China Unicom, and China Telecom, the New York Stock Exchange initially announced the delisting of these three Chinese telecommunications companies, then reversed its decision after consulting with regulatory bodies, only to ultimately reinstate the delisting plan following a subsequent evaluation.

The Xiaomi representative indicated, “The company is currently assessing the potential ramifications of this development to gain a comprehensive understanding of its impact on the group. Further announcements will be made as appropriate.”

Xiaomi is publicly traded on the Hong Kong stock exchange, and this executive order could compel American investors to sell their shares in the company. Following the announcement of the blacklist, Xiaomi’s stock price declined by over 11%, reaching $29 per share.

Although Xiaomi’s current operations and access to technology remain unaffected by this latest action from the U.S. government, the possibility of a future supply chain restriction looms. The Chinese phone maker maintains a strong relationship with Qualcomm and was among the first to receive the advanced Snapdragon 888 chips. In an effort to circumvent the restrictions imposed by the entity list, Huawei separated its budget phone division, Honor, to preserve its supply chain. The approach that Joe Biden will take regarding Trump-era policies concerning Chinese technology companies remains to be seen.