Amid the uncertainty and stress of trade tensions between the U.S. and China, one of America’s top transportation companies, FedEx, is suing the federal government…
Apparently, the target of this lawsuit is a federal export ban that would require FedEx to police what’s in its packages, in order to remove Chinese goods from supply chains and consumer pipelines.
In a press statement, the company called this mandate “a virtually impossible task, logistically, economically, and in many cases, legally.”
Ironically enough, FedEx is also under scrutiny by China because of its handling of packages for telecom company Huawei. Making this all the more complicated, the U.S. White House has asked American companies not to buy from Huawei or utilize its products in the coming 5G upgrade.
News media reports FedEx managers are worried that China will take away reservations from its probe into FedEx and add the U.S. firm to a “blacklist” of foreign companies.
Ahead of FedEx earnings due to drop tonight, shares are down almost 2%.
Who knows what FedEx earnings would be if the company wasn’t embroiled in this geopolitical scuffle. FDX lost almost a quarter of its stock value in about a month (with prices near $200 mid-April). Does any of that have to do with trade uncertainty? Possibly.
Can a nation so involved in global supply chains punish a major producer and buyer through tariffs without experiencing inherent blowback? In China’s responses, its diplomats basically point out that two can play at this game. And the unspoken ace up the sleeve is the abundant Chinese holding of U.S. Treasury bonds.
Look for the FedEx numbers tonight, and don’t forget to factor in the pressure of a mounting trade conflict.
