China investigates FedEx for Huawei cargo error

Jun 02, 2019, 00:28
China investigates FedEx for Huawei cargo error

Separately, the world's second-largest economy voiced plans to increase tariffs on $60 billion in US goods, which are expected to come into force on Saturday, in retaliation to US President Trump's decision to punish China with levies on $200 billion worth of Chinese goods earlier this month. No specific companies were named, but the list will target firms that block or deny supplies to Chinese industries.

China will publish a white paper on its position on trade talks with the USA on Sunday in Beijing.

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China will investigate whether FedEx Corp damaged the legal rights and interests of its clients, the official Xinhua news agency said on Saturday, after Chinese telecoms giant Huawei said parcels intended for it were diverted. As a result, Huawei is losing access to key components and software needed to produce its Android smartphones and Windows laptops.

The Ministry unveiled the initiative on Friday, without specifying the measures to be taken against the blacklisted companies, which it said would be announced in the near future. Now, China's biggest tech company said it's reviewing its relationship with the USA delivery service. On another front, President Donald Trump said he plans to impose a 5% US tariff on all Mexican goods over illegal immigration.

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China's response seems to escalate trade-war tensions, but in reality, there's probably little that China can do to whatever companies end up on its list.

After being added to the list, a series of United States companies said they would cut off their business with Huawei, while foreign companies have also been left to analyse if the order applies to their business with Huawei. Around 80% of USA rare earths imports is supplied by China. The measures would likely focus on heavy rare earths, a sub-group of the materials where the particularly reliant on China. After the US announced an increase in tariffs on $200 billion a year of Chinese goods to 25% from 10% earlier this month, Beijing retaliated by raising levies on around $60 billion annually of USA imports, starting June 1.

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The US government has moved to curb Huawei's ability to sell equipment in the US and buy parts from US suppliers, potentially crippling one of China's most successful - but controversial - global companies.