China’s Commerce Ministry announced
the creation of the list in late May to target firms that the government says damage the interests of domestic companies.
That followed US curbs on Huawei
Technologies Co. FedEx
drew the ire of Chinese officials after Huawei
said that documents it asked to be shipped from Japan to China were instead diverted to the US without authorization.
The ministry didn’t respond to a request for comment, and the Foreign Ministry declined to comment on whether FedEx
would be placed on the list.
“We hope we satisfied them that this wasn’t any nefarious activity on our part,” FedEx
Chief Executive Officer Fred Smith said on Fox News.
“It was just a well-intentioned FedEx teammate that made an error. We’ll just have to wait and see.”
The shares fell 1.9% to $157.86 at 9:44 a.m. Tuesday in New York. FedEx was little changed this year through Monday, while the S&P 500 climbed 17%.
US President Donald Trump and China’s Xi Jinping are scheduled to resume talks later this week at the G-20 summit in Osaka, Japan, with no signs their tit-for-tat trade war will end any time soon. Blacklisting Memphis, Tennessee-based FedEx could have a significant impact on its business in China. The Commerce Ministry has yet to release details about the consequences of being added to the unreliable entities list.
FedEx in September said that package deliveries between the US and China represent 2% of total sales, which would be about $1.3 billion based on 2018 revenue. The company, which doesn’t typically break out sales by country, hasn’t given an amount for its entire China business.
China’s Global Times newspaper tweeted on Sunday about the likely blacklisting.
FedEx apologized last month for delivery mistakes on the two diverted Huawei
The company is suing
the US Commerce Department to block enforcement of tougher restrictions on exports and imports, saying the curbs force it “to police the contents” of millions of packages.
The global courier, scheduled to report quarterly earnings Tuesday afternoon, says it’s being made to choose between operating under the threat of US punishment and facing potential legal trouble from customers and foreign governments.