Is FedEx the First of Many Trade War Casualties?

Late last week, China announced it was launching an investigation into FedEx, alleging that FedEx had “not made deliveries according to the name and address” of the intended recipients of packages FedEx handled.  As a result, China said companies that shipped and companies that were supposed to receive packages suffered damages.  You give me tariffs, I’ll raise you by investigating your companies.  (https://www.bloomberg.com/news/articles/2019-06-01/china-launches-investigation-into-fedex-xinhua

Perhaps most interestingly, at least two packages that were not delivered properly were sent from Huawei, the telecom technology company whose products the US has essentially banned from being used.  The packages were destined for Japan but somehow got routed to the US.  The packages were then returned to Huawei.  FedEx apologized for the “delivery errors.”  This situation has all the makings of a good Tom Clancy book. 

Analysts are already speculating about which company China will investigate next.  Businesses and financial markets do not like uncertainty.  China understands that and will continue to fight the trade war by creating uncertainty for US companies.  US companies will respond by tempering their investments both at home and abroad.  Less investment means less growth.  Less growth means less jobs.  President Tweet better be careful or he’ll become a casualty of the trade war. 

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