HONG KONG / SHANGHAI (Reuters) – The US supply company FedEx Corp ( FDX.N ) probably held back more than 100 packages of Huawei, a report said while the Chinese technical giant also blamed US-listed Flex ( FLEX.O ) to seize their goods, as Chinese-American tensions further straining business ties.
A federal Federal Express truck appears in the center of Los Angeles, California, USA, October 24, 2018. REUTERS / Mike Blake
Chinese authorities investigating FedEx suspect that they have illegally withheld the Huawei packages and that it also broke other laws, the state news agency Xinhua reported Friday.
Beijing started a probe in FedEx last month after Huawei said the US shipping company had diverted packages intended for it. It came after Huawei was placed by Washington on a black list in mid-May that effectively prevented US firms from doing business with the Shenzhen-based telecoms manufacturer.
"The survey showed that FedEx was suspected of holding up more than 100 Huawei packages coming into China," Xinhua said. "Investigators also discovered clues to other company violations."
FedEx had no immediate comment on the report. Huawei refused to comment.
The report comes a day after Huawei said the electronics contract manufacturer Flex "grabbed" their goods in China.
Developments mark the latest fall from Washington's trade ban on Huawei, which has not only rattled the global technology supply chain associated with Huawie's $ 105 billion, but also creates a lot of confusion among companies and organizations far beyond US borders regarding the limits of restrictions.
FedEx has apologized for several incidents of derivative Huawei packages attributed to "malfunctions", but later sued the US government for what it said as an "impossible task" to "politicize the content" in export shipments.
Huawei told Reuters Thursday that Flex had held back about 700 million yuan ($ 101.81 million) of its goods in its factory in China, confirming a report by the Chinese government-sponsored Global Times.
Flex retained the Huawei assets in the factory in the southern city of Zhuhai after the US Black List and caused losses to Huawei, the report said.
Huawei told Reuters that it has retrieved about 400 million yuan last month after negotiations and is still trying to recover the rest.
Flex said in an email statement to Reuters, "Flex and Huawei have had a long-standing and successful partnership that has recently been impacted by unforeseen challenges due to the US / China trading situation. Both parties are actively working to find a mutually acceptable way forward given these facts. "
A spokesperson for Flex refused to say whether it still had any Huawei assets or counts Huawei as a customer, but said China is still" a very important center of production and end market "where it employs tens of thousands of people.
Flex said in its quarterly revenue statement on Friday that it would accelerate a move to reduce exposure to certain products in China and India following "recent geopolitical development and uncertainty", which primarily affected "a customer in China" . It didn't name the customer.
"We have seen a reduction in the demand for products gathered for that customer," it says.
Reporting by Sijia Jiang in Hong Kong and Josh Horwitz; Editing by Brenda Goh and Muralikumar Anantharaman