China sets up blacklist to hit back in Huawei fight

Fredrick Soto
June 2, 2019

The move appears to be direct retaliation for Huawei's placement on the US Commerce Department "Entity List" that effectively bans the sale of Huawei products in the US, though the Chinese tech giant was not mentioned specifically.

The Commerce Ministry is going through relevant procedures, and will release the first batch of blacklisted entities soon, according to state-media China Central Television.

The ongoing trade war between the U.S. and China is showing no sign of slowing down and it could actually get worse as China has announced plans to follow in the US' footsteps by creating a blacklist of its own. That step has helped broaden the tariff war into a wider confrontation between China and the USA, at a time when negotiations between the two sides have broken down.

Huawei, the world's largest telecoms equipment maker, told Reuters on Friday it was reviewing its relationship with FedEx, which it alleged had diverted two parcels destined for Huawei addresses in Asia to the United States and had attempted to reroute two others.

"Some foreign entities have violated normal market rules and the spirit of their contracts for non-commercial purposes, blockading and cutting off supplies and taking other discriminatory actions against Chinese companies damaging their legitimate rights and interests, and endangering China's national security and national interests", Gao continued.

-China trade war continues to escalate, Beijing has signaled its newest target: FedEx.

On Saturday, Chinese retaliatory tariffs on the USA goods kicked in, after the Trump administration raised tariffs on Chinese goods worth $200 billion to 25 percent, from 10 percent. Bloomberg reported on Friday that China has a plan to restrict exports of rare earths to the USA if it needs to.

The US restrictions on doing business with Huawei have hit the company hard, with many multinational companies playing it safe by announcing they will halt cooperation. Huawei accused FedEx of shipping two packages containing documents destined for Huawei in China to the USA without authorization, Reuters reported.

China will publish a white paper on its position on trade talks with the US on Sunday in Beijing.

Should the so called entity list come to fruition, it is not certain which firms and what limitations will be placed on firms that will eventually make the list.

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