FedEx confirms Huawei mail ban as new 'mistake' reignites Chinese ire

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FedEx is already under investigation in China for failing to deliver some of Huawei's parcels.

The move came after FedEx reignited Chinese ire over its business practices when a package containing a Huawei phone sent to the United States was returned last week to its sender in Britain, in what FedEx said was an "operational error".

USA parcel delivery firm FedEx Corp on Monday sued the us government, saying it should not be held liable if it inadvertently shipped products that violated a Trump administration ban on exports to some Chinese companies.

PC Mag tried to ship a Huawei P30 between its United Kingdom and U.S. office only to find it returned to London with a note attached saying the product wasn't welcome.

On Friday, a journalist at PC Mag sent out a tweet of a photo of a package along with a note reading: "Parcel returned by FedEx, due USA government issue with Huawei and China government".

FedEx apologised at the end of May for "misrouting" a "small number" of Huawei packages, but said no third party had asked the parcels be transferred.

China is also drawing up its own "Unreliable Entities List" of foreign firms, groups and individuals.

Entangled in the White House's trade war with China is the world's biggest seller of telecom-network equipment: Huawei.

The Beijing News, a municipal government-run newspaper, in an editorial on Monday, said FedEx had misinterpreted the USA ban and called on US firms to be "rational" and not to over-react.

FedEx stopped the shipment due to "U.S. government issue with Huawei and China".

Misdeliveries of packages is not at all uncommon, but given the intensity of current trade tensions between the United States and China, even an honest mistake of this kind could be interpreted by Chinese officials as a further effort by the United States behind the scenes to harm a major Chinese firm. There doesn't seem to be any legal reason FedEx couldn't deliver a Huawei phone.

The latest incident sparked renewed criticism of FedEx on Chinese social media, with the topic "FedEx apologises again" trending on Weibo, China's Twitter-like microblog platform.

According to the Global Times, which is known to be supportive of the Chinese state, Fed Ex is now likely to be added to something called the "unreliable entities" list, which is rumoured to have been recently created by the Chinese state to give the USA a taste of its own medicine.

Neither China's commerce ministry nor FedEx responded to Reuters requests for comment on the likelihood of FedEx being added to the blacklist.

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 USA company, amid the trade spat.

Being in the "crosshairs" of the Chinese government "is a tremendous headwind and risk" for FedEx, Trip Miller, said managing partner at Memphis-based Gullane Capital Partners, which holds a FedEx position valued at roughly $7 million.

The United States and China have been engaged in a trade dispute for months on issues such as tariffs, subsidies, technology, regulations and cybersecurity, among others, with Washington putting Huawei on a blacklist last month citing national security.

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