Tennessee based FedEx gets tangled in U.S.-China trade, technology battle

Jun 3, 2019

Credit fedex.com

MEMPHIS, Tenn. (WMOT/AP) -- One of Tennessee’s largest companies has been caught up in the trade and technology dispute raging between the United States and China.

The Chinese government has launched an investigation into the Memphis based shipping company. The move follows charges by Chinese tech giant Huawei that FedEx intentionally diverted some of its packages, a claim FedEx denies.

The missed deliveries drew unusual attention because of speculation that they're related to rising U.S.-China trade tensions and U.S. sanctions on Huawei. Four packages containing paperwork sent out by Huawei were found to have been diverted to FedEx headquarters in Memphis, instead of being delivered to Huawei offices in Asia.

China has opened an investigation into FedEx's actions. A government controlled news outlet says the package diversion "severely harmed clients' legitimate rights and interests and violated China's delivery industry regulations."

FedEx apologized and said the packages were misrouted accidentally. It added that the company wasn't told by anyone to divert the packages. Huawei officials have questioned whether the diversions were truly inadvertent.

China announced its investigation into FedEx on the same day that its latest tariffs on $60 billion worth of U.S. products went into effect. The duties of 5% to 25% are retaliation against President Donald Trump's decision to raise duties on $200 billion of Chinese imports to 25%, up from 10% previously.

The U.S. has accused China of stealing trade secrets and forced technology transfers. It has placed Huawei on its "Entity List," effectively barring U.S. firms from selling technology to Huawei without government approval. China responded to this action Friday, announcing that it will establish its own list of "unreliable entities" consisting of foreign businesses, corporations and individuals.

FedEx is a $65 billion a year company with some 11,000 employees working at it's Memphis headquarters.