WASHINGTON—The U.S. Defense Department will remove China’s Xiaomi from a government blacklist, a court filing showed, marking a reversal by the Biden administration of one of former President Donald Trump’s last actions aimed at Beijing before exiting office. The court filing said the company and the U.S. government would agree to resolve their ongoing litigation, bringing to an end a brief conflict between the hardware company and Washington. A Xiaomi spokeswoman said the company is watching the latest developments closely, without elaborating. Shares in the company jumped over six percent in Hong Kong as news of the decision spread. The company’s share price has tumbled roughly 20 percent since it was placed on the blacklist in January. The Defense Department did not immediately comment. A Justice Department spokeswoman declined to comment. The department had designated the firm as having ties to China’s military and placed it on a list that …