The US has agreed not to put Xiaomi on a blacklist blocking investment in the Chinese tech company, undoing a move made in the last week of the Trump administration. Xiaomi sued the US government over the designation, but just filed a joint status report with the Department of Defense saying the two parties “have agreed upon a path forward that would resolve this litigation without the need for contested briefing.”

The DoD had decided to designate Xiaomi as a “Chinese Communist Military Company,” which could have forced any American investors to divest their holdings in Xiaomi by November this year. After Xiaomi sued the government in response, a district judge issued a preliminary injunction to block the blacklisting, calling it “arbitrary and capricious.”

The US didn’t appeal the preliminary injunction against it. Xiaomi told The Verge in January that the company “is not owned, controlled or affiliated with the Chinese military, and is not a ‘Communist Chinese Military Company.’”

Now it looks like the matter will be settled on better terms. Xiaomi and the DoD have “agreed that a final order vacating the January 14, 2021 designation of Xiaomi Corporation as a CCMC … would be appropriate,” according to the court filing. The two parties now plan to negotiate on an order vacating agency action, with a joint proposal expected before May 20th.

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