FedEx files lawsuit against US Department of Commerce to mend damaged reputation with Chinese customers

Source:Global Times Published: 2019/6/25 14:05:28

FedEx has filed a lawsuit against the Department of Commerce in the US on Monday over rules on export shipments, according to a statement the company sent to the Global Times, an act to assuage wide-spread criticism over its failure to deliver Huawei phone to the US, according to experts.

The company was previously asked for clarification by the Chinese Foreign Ministry after it failed to ship a Huawei phone to the US from the UK. FedEx's refusal to give an account of the phone incident has sparked wide-spread criticism of the company on the internet, with many citizens calling for the company to be included on China's "unreliable entity list".

Liu Jianxin, an expert from the China Communications and Transportation Association told the Global Times on Tuesday it is an emergency public relation response by FedEx after the Huawei incident sparked outrage in China. "FedEx is in dire need of restoring its damaged reputation with Chinese consumers and other international clients," Liu said.

Li also noted that that the lawsuit shows the immense pressure and confusion posed by the EAR on US companies.

"US carrier companies such as FedEx are now caught between a rock and a hard place," Liu said, "On one hand, as a US company, it is obliged to obey US regulations, but on the other hand, obeying US regulations could ruin its business reputation with global clients."

Liu noted that as the lawsuit is the US companies' response to laws enacted by their own government, and although chances of success are slim, it may put more pressure on the US Commerce Department to think twice about the EAR.

On Monday, when China's Ministry of Foreign Affairs demanded an explanation from FedEx, it emphasized that the US government is the "real cause of confusion".

According to FedEx's statement, the lawsuit is against the Export Administration Regulations (EAR), which FedEx said "violates common carriers' rights" and poses "impossible burdens on common carriers like FedEx".

"We contacted the Department of Commerce today and told them that the increasing use of restrictions on exports and imports by the Commerce Department in various geopolitical and trade disputes creates just an impossible burden on FedEx and common carriers," FedEx CEO and chairman Fred Smith said in a TV interview by Fox News on Tuesday.

"Because, under the Department of Commerce's regulations, we are expected to be the policeman for these export and import controls - and there are about 1,100 entities now on this list and five were just added last Friday," he said.



Posted in: ECONOMY,COMPANIES

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