FedEx 'Misdelivers' Another US-Bound Huawei Package, Prompts Threat from China

FedEx confirmed Sunday that a second Huawei package bound for the US was "misdirected" and returned to the company, the second such "error" since the company's US blacklisting.
John Loeffler

In the second such "misdelivery" since Huawei was placed on a US government trade blacklist, FedEx confirmed on Sunday that a Huawei package bound for the United States was the subject of an operational error that ended up sending the package back to the shipper.

FedEx 'Misdelivers' Another Huawei Package, Adding Fuel to Fire of US-China Dispute

In the second such incident since the US government placed China's Huawei on its Entity List, a package sent to the United States by Huawei Technologies through US-based FedEx was returned to the company, causing the Chinese government to threaten to place FedEx on an 'Unreliable entities list', according to a new report by Reuters.


FedEx, meanwhile, confirmed to Reuters in an emailed statement that "The package in question was mistakenly returned to the shipper, and we apologise for this operational error."

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.

The US is not officially enforcing its trade blacklisting yet, which prevents any firm in the US or overseas firm who relies on US technology from doing business with that company without the approval of the US government. A 90-day grace period was announced after Huawei's designation last month to allow international companies affected by the US blacklisting to make the necessary efforts to untangle Huawei from their business dealings and supply chains.

On Friday, US Commerce Department officials announced that several additional Chinese companies and an institute owned by the Chinese government that works with supercomputers that have a potential military use will also be added to the US Entity list, preventing them from purchasing US-sourced electronic components or other materials.

China Responds to FedEx 'Error' with Threat of Retaliation

In a tweet from the Global Times newspaper, published by the ruling Communist Party's People's Daily, the government is now considering adding FedEx to its so-called 'unreliable entities list,' a list that the Chinese government established last month to designate companies, groups, or persons as harmful to the interest of Chinese firms.

Earlier this month, the Chinese government began investigating FedEx for misdelivering parcels from Huawei to the wrong addresses, though it hasn't provided any further details. At the time, Xinhua, China's state news agency, reported that the investigation wasn't retaliation against a US-based company, but the implication of launching such an 'Unreliable entities list' when they did--even the name evokes the language of the US' entity list, in case you were worried that China would be too subtle--and threatening a very prominent US-based firm for its perceived treatment of Huawei cannot be much more obvious.

FedEx, for its part, said that "FedEx can accept and transport all Huawei products except for any shipments to listed Huawei entities on the U.S. Entity List.”

It was worth a shot, FedEx, but Huawei, who according to Reuters, was already reexamining its relationship with FedEx after the earlier incident, so FedEx will likely have just soured its business relationship with the second largest electronics supplier in the world after Samsung with this recent incident, intentional or not.

And even if China and the US reach a trade agreement in the near future and Huawei is taken off the US blacklisting, China seems to want to make very clear to US firms and others around the world that it will be making note of who the friends of Chinese firms are going forward, and who was 'unreliable' when it counted.