China is investigating logistics service provider FedEx Corp. for allegedly damaging the interest of Chinese customers, the state-run Xinhua News Agency reported June 1.
The move could further escalate tensions between the U.S. and China as both countries on June 1 imposed previously announced higher tariffs on billions of dollars' worth of each other's imports.
The Chinese government is launching the investigation after FedEx recently failed to deliver express packages to designated addresses in China, according to the report. While Xinhua did not specify who the Chinese clients were and the magnitude of damage caused, The Wall Street Journal cited a Huawei Technologies Co. Ltd. spokesman as confirming that the investigation was a result of a complaint filed by the Chinese company against FedEx.
The Chinese telecom giant at the center of escalating tensions between Beijing and Washington filed the complaint days after FedEx diverted two China-bound parcels sent from Japan to the U.S. and attempted to reroute two others sent from Vietnam, Reuters reported May 28.
FedEx has apologized publicly for mishandling Huawei's packages, according to the Journal. The logistics firm did not immediately respond to S&P Global Market Intelligence's request for comment.
This is the first time that China has opened an investigation against a U.S. company since the beginning of trade tensions between the world's two largest economies.