FedEx Apologies for Second Huawei Package Mishap, Chinese Media Retaliates

June 24, 2019 Updated: June 24, 2019

FedEx Corp has apologized for returning a package which the sender said contained a Huawei smartphone, blaming an “operational error” as it works to comply with U.S. restrictions on business with China’s Huawei Technologies Co Ltd.

The error came less than a month after FedEx apologized for misdirecting packages sent between offices of Huawei. The telecom equipment maker subsequently said it would review its relationship with the U.S. delivery firm, while Chinese state media said authorities are investigating the matter.

Weeks earlier, Huawei was placed on the United State’s “Entity List,” meaning American companies must apply for special permission to conduct business with related firms. The U.S. government deems Huawei a security risk due to Chinese law requiring domestic companies to comply with intelligence work.

Huawei had relied on U.S.-connected companies to supply components and software for its networking gear and smartphones.

On June 21, PC Magazine said FedEx had returned a Huawei phone that the American publication had sent from Britain to the United States.

In response to a Reuters inquiry, FedEx on Sunday said it “can accept and transport all Huawei products except for any shipments to listed Huawei entities on the U.S. Entity List.”

A FedEx spokeswoman confirmed the package in question was bound for the United States but declined to disclose its contents.

Huawei on Sunday tweeted and accused Fedex of preventing the delivery and claimed the courier had a “vendetta.”

On Monday, China’s foreign ministry said FedEx should offer a proper explanation.

The list expanded on Friday with the addition of several Chinese companies and a government-owned institute involved in supercomputing with military applications.

The incident sparked renewed criticism of FedEx on Chinese social media, with the topic “FedEx apologizes again” trending on Weibo, China’s Twitter-like microblog platform.

State-run newspaper Global Times on Sunday tweeted that FedEx is likely to be added to the Chinese government’s upcoming Unreliable Entities List of foreign firms, groups and individuals that harm the interests of Chinese companies. Global Times is published by the ruling Communist Party’s People’s Daily.

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

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. It was the latest move by Beijing to retaliate against the United States amid escalating trade tensions.

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.

A telephone call between U.S. President Donald Trump and Chinese leader Xi JinPing 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.

By Kanishka Singh