Over the weekend, Fedex Corporation (NASDAQ: FDX) became involved in developing trade frictions between the U.S. and China. China’s commerce ministry also announced on Friday that they will be unveiling a “hit list” of foreign firms, groups, and individuals that are deemed detrimental to Chinese companies. Coupled with the upcoming list, U.S. firms are nonplussed concerning long-term business with China.
Trade talks between the U.S. and China have been unexpectedly deteriorating over the last month and these further developments have shaken U.S. firms to an even greater extent. This can attributed to Washington recently accusing Beijing of falling through on previous agreements, as well as the U.S. placing the Chinese tech giant, Huawei, on a blacklist last month. The US-China Business Council (USCBC), which represents roughly 200 American companies that do business in China, stated on Monday that anxiety among its members is exponentially rising as a result of the announcement of the list.
“The key point for them is that there’s a great deal of uncertainty on how the list will be implemented and what negative repercussions will be brought about should a company be added to the list. At the moment many of our companies are wondering whether this is an attempt by the Chinese government to increase their potential leverage in the trade negotiations, or if it’s an actual effort to force companies into an unenviable position of choosing between the two markets” said Jacob Parker, Vice President of The US-China Business Council’s Chinese operations.