There are strong indications that Beijing will take strong measures against U.S. package delivery giant FedEx as a reaction to misdirected Huawei shipments. The continued mishaps prompted the Chinese government to launch an official investigation into FedEx.
The smoldering conflict between the Trump administration and China, centered on Huawei, entered the next phase when the U.S. Department of Commerce placed Huawei on their “Entity List” ten days
ago. Ever since, U.S. firms are barred from selling their technology to Huawei and other Chinese firms without government approval. Huawei relies heavily on U.S. components, including computer
chips, and about one-third of its suppliers are based in the USA.
The moves against Huawei are part of a broader trade war between the world's two largest economies that has both sides imposing billions of dollars of punitive tariffs against each other's products.
Is FedEx a Scapegoat?
Now China seems to hit back targeting U.S. parcel mammoth FedEx accusing the Memphis, Tennessee-based company having "seriously violated the legitimate rights and interests of customers," writes news agency Xinhua in a report published last Saturday.
The step follows a series of Huawei complaints, accusing FedEx of sending multiple parcels to FedEx headquarters in the U.S. rather than delivering them directly to Huawei's Asian offices as ordered.
In a statement, FedEx apologized and said that the packages had been “mistakenly misdirected.”
In response to the escalating U.S. sanctions, Beijing announced on Friday to set up its own list of "unreliable" foreign companies, with FedEx standing on top. The blacklisted companies, organizations and individuals are prohibited from doing business in China.
Next round of sanctions
In accordance with this provision, Shenzhen-based Huawei LCD display supplier Menpad said it will penalize any employee that buys an Apple iPhone. Instead, the company announced to subsidize purchases of Huawei and ZTE products, a provider of telecommunication systems also based in Shenzhen.
Beijing’s decision to put FedEx in the dock marks a new peak in the trade war between the U.S. and China. The step seems to have been synchronized with China’s new punitive tariffs that came into force last Saturday as retaliatory action against levies imposed by Washington before.
Affected are U.S. goods worth 60 billion dollars.
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