FedEx blocks delivery of Huawei P30 Pro to the United States

China launched an investigation into Fed Ex earlier this month over parcels delivered to the wrong address without giving details about the deliveries in question

China launched an investigation into Fed Ex earlier this month over parcels delivered to the wrong address without giving details about the deliveries in question

Fears that China would blacklist FedEx as a result sent its shares down 2.7 percent on Monday.

FedEx's suit and delivery error come against a backdrop of increasing tension between the world's two biggest economies.

The United States and China have been engaged in a trade fight for almost a year on issues such as tariffs, subsidies, technology, regulations and cybersecurity, among others.

The list mirrors the U.S. Entity List that Huawei was added to in May, essentially barring it from buying U.S. technology upon which it was heavily reliant. "We simply can't be the policeman for the U.S. Department of Commerce", FedEx Chairman and CEO Fred Smith told Fox News' Bret Baier.

"FedEx can accept and transport all Huawei products except for any shipments to listed Huawei entities on the US Entity List", the company said on Sunday.

FILE PHOTO: A Federal Express truck makes its way down a freeway in San Diego, California August 22, 2014.

Amid a bruising trade dispute between Washington and Beijing, China threatened late in May to unveil an unprecedented hit-list of "unreliable" foreign firms, groups and individuals that harm the interests of Chinese companies.

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"Parcel returned by FedEx, due US government issue with Huawei and China government [sic]", the notice on the returned package read.

The incident comes as Chinese authorities investigate FedEx for misrouting packages sent by Huawei last month. According to a company spokesperson, "There is not a general ban on shipping Huawei devices between United Kingdom and United States locations,". Cryptically, though, the company did point out that "the return to sender label attached to the package in question was not generated by FedEx".

The US is not officially enforcing its trade blacklisting yet, which prevents any firm in the US or overseas firm who relies on US technology from doing business with that company without the approval of the US government.

China's foreign ministry on Monday nevertheless asked for a full explanation.

Huawei, which said it was reviewing its relationship with FedEx after the mishandling of its packages earlier, did not immediately respond to a Reuters request for comment on Sunday. At the time, Xinhua, China's state news agency, reported that the investigation wasn't retaliation against a US-based company, but the implication of launching such an "Unreliable entities list" when they did-even the name evokes the language of the US' entity list, in case you were anxious that China would be too subtle-and threatening a very prominent US-based firm for its perceived treatment of Huawei can not be much more obvious.

Being in the "crosshairs" of the Chinese government "is a tremendous headwind and risk" for FedEx, Trip Miller, said managing partner at Memphis-based Gullane Capital Partners, which holds a FedEx position valued at roughly $7 million.

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