FedEx Misses Delivery of Huawei Package to US, China Paper Says Retaliation Threatened

FedEx Corp said on Sunday an operational error prevented a Huawei Technologies package from being delivered to the United States, just weeks after the US delivery company said an error led to the Chinese firm's packages being misdirected.

China's Global Times newspaper said in a tweet later the company is likely to be added to China's 'unreliable entities list' due to the incident, which occurred days before US President Donald Trump and China's Xi Jinping are due to meet in Japan to try to deescalate a trade war.

Trade tensions between the United States and China have extended beyond tariffs, particularly after Washington put Huawei, the world's biggest telecoms gear maker, on a blacklist that effectively bans US firms from doing business with the company.

"The package in question was mistakenly returned to the shipper, and we apologise for this operational error," FedEx told Reuters in an emailed statement. A company spokeswoman confirmed that the package was US bound but declined to say what it contained.

China threatened in late May to unveil its own unprecedented hit-list of "unreliable" foreign firms, groups and individuals that harm the interests of Chinese companies.

China did not single out any countries or companies, but said the list will apply to companies who flout market rules and the spirit of contracts, block supplies to Chinese companies for non-commercial reasons and "seriously harm the legitimate rights and interests" of Chinese companies, according to a report in state-run China National Radio.

The commerce ministry will disclose more details of the list soon, the report said.

China's commerce ministry and FedEx did not respond to a request for comment on the likelihood of FedEx being added to the 'unreliable' list. Global Times is published by the ruling Communist Party's People's Daily.

The US Commerce Department said on Friday it was adding several Chinese companies and a government-owned institute involved in supercomputing with military applications to its own entity list that bars them from buying US parts and components without government approval.

China launched an investigation into FedEx earlier this month over Huawei parcels delivered to the wrong address, without giving details about the deliveries in question.

China's state news agency Xinhua had said at the time that the investigation into FedEx over misdirected mail should not be regarded as retaliation against the US company, amid the trade spat.

"FedEx can accept and transport all Huawei products except for any shipments to listed Huawei entities on the US Entity List," the company said on Sunday.

Huawei, which said it was reviewing its relationship with FedEx after the mishandling of its packages earlier, did not immediately respond to a Reuters request for comment on Sunday.

The United States and China have been engaged in a trade fight for nearly a year on issues such as tariffs, subsidies, technology, regulations and cyber security, among others.

A telephone call between Trump and Xi last week, as well as confirmation the two will meet in Japan on the sidelines of a Group of 20 summit, have rekindled hopes of a detente.

© Thomson Reuters 2019