Published: Sun, June 02, 2019
Finance | By Kristine Clayton

China Targets FedEx in ‘Warning’ to U.S.

China Targets FedEx in ‘Warning’ to U.S.

While Huawei founder Ren Zhengfei isn't a real proponent of a retaliative sanctions against USA tech firms, particularly Apple, the Chinese Authorities is already considering hitting back at United States firms, even though Apple might not be the principal target.

On Saturday, Chinese retaliatory tariffs on the US goods kicked in, after the Trump administration raised tariffs on Chinese goods worth $200 billion to 25 percent, from 10 percent.

It's been weeks since the USA listed Huawei in its Entity list, effectively banning the brand from being used by other United States companies.

"Surely companies that have announced cutting supplies to Huawei, such as Panasonic and Toshiba, would be under threat", said Michelle Lam, Greater China economist at Societe Generale SA in Hong Kong. FedEx said the packages were "misrouted in error".

According to Global Times, a Chinese news site, the country is planning to release an "Entity List" in response to U.S. President Donald Trump's own list which caused Chinese company Huawei to spiral into a nosedive.

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

The vague wording of the Chinese state media report opens the door for Beijing to target a broad swathe of the global tech industry - from USA giants like Alphabet Inc.'s Google, Qualcomm Inc. and Intel Corp. to even non-American suppliers that have cut off China's largest technology company.

Xinhua used two hashtags in Weibo posts on the FedEx probe: #ChinaUSTrade and #RetaliateAgainstUSTradeBullying.

Huawei officials have questioned whether the diversions were truly inadvertent.

Cutting off exports to the U.S. could give Beijing leverage in trade talks as China supplies 80 percent of the rare earths imported by the United States. The phone brand was placed in May on the U.S.'s "Entity List", which effectively prevents American firms from selling it technology without government approval.

With markets roiled by the threats and rhetoric on trade, the S&P 500 had its worst month of May in seven years.

The tit-for-tat moves now involving lists come amid an intensifying trade war between the two countries.

-With assistance from Crystal Chui and Dandan Li.

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