Trade war: China targets FedEx in ‘warning’ to US

Bloomberg

China targeted FedEx Corp in its escalating trade war with the US, giving a hint of the kind of foreign companies it may blacklist as “unreliable.”
As details of China’s criteria trickled out, the investigation into FedEx’s “wrongful delivery of packages” was framed by the state news agency as a warning by Beijing after the Trump administration imposed a ban on business with telecom giant Huawei Technologies Co.
A Chinese official said that the government is firmly against the US’s “long-arm” jurisdiction on Huawei, while downplaying concerns that the planned list of unreliable entities will be used to target foreign companies as a retaliation tool in the trade war.
To designate an untrustworthy foreign entity, China will look at whether it discriminates against domestic companies, the state-run Xinhua news agency said. Other considerations will be violations of market rules, breach of contract, harm caused to Chinese firms and actual or potential threats to national security, it reported.
The latest salvo signals there’s no detente in sight in the struggle between the world’s two biggest economies at a time when trade talks have broken down. Chinese retaliatory tariffs on US products kicked in, affecting more than 2,400 goods that face levies of as much as 25 percent compared with 10 percent previously.
On Sunday, China blamed the US for the collapse of trade talks and said it won’t buckle under maximum pressure to make concessions. The trade war hasn’t “made America great again,” and while China doesn’t want conflict, it won’t shy away from one, according to a white paper on its negotiations with the US.
China had said it will draw up a list of “unreliable entities” that harm the interests of Chinese companies. That opens the door to targeting a broad swathe of the global tech industry, from US giants like Alphabet Inc’s Google, Qualcomm Inc and Intel Corp to non-American suppliers that have cut off Huawei, such as Toshiba and Arm.
FedEx has apologised for delivery errors on Huawei packages following reports that parcels were returned to senders, and China’s biggest tech company said it’s reviewing its relationship with the US delivery service. Two packages containing documents being shipped to the company in China from Japan were diverted to the US without authorisation, Reuters reported. China opened a probe because FedEx violated Chinese laws and regulations and harmed customers by misdirecting packages, Xinhua said. Vice Commerce Minister Wang Shouwen said that “there’s no grounds to blame China” for starting the investigation into FedEx.