China launches investigation of FedEx in trade war escalation

China is reportedly launching an investigation into FedEx Corp. for the wrongful delivery of packages, escalating the growing trade war between Washington and Beijing.

The U.S. express delivery company violated Chinese laws and industry regulations by failing to send packages to correct addresses, the state-run Xinhua News Agency reported on Saturday. That seriously harmed the legitimate rights and interests of its customers, and authorities decided to initiate an investigation, according to the report.

Earlier this week, FedEx apologized for delivery errors on Huawei Technologies Co. packages following reports that parcels were returned to senders. Two packages containing documents being shipped to the company in China from Japan were diverted to the U.S. without authorization, Reuters reported, quoting a company spokesman.

Huawei said it was reviewing its relationship with FedEx.

“Now that China has established a list of unreliable entities, the investigation into FedEx will be a warning to other foreign companies and individuals that violate Chinese laws and regulations,” China Central Television said in a commentary read on its flagship evening news program.

“China welcomes foreign companies on condition that they abide by China’s law, regulation, market rules and the spirit of contract, and can’t harm Chinese customers’ legitimate rights.”

China said Friday that it would keep a tally of “unreliable entities” that harm the interests of domestic companies, which could affect foreign enterprises as trade tensions escalate.

China’s retaliatory tariffs on the U.S. officially kicked in Saturday, affecting more than 2,400 products that face levies of as much as 25%, compared with the previous charges of 10%.

China will lay out its position on trade talks with the U.S. in a white paper and Vice Commerce Minister Wang Shouwen will take questions at a rare news conference on the issue on Sunday in Beijing, according to an official statement.

Xinhua used two hashtags in the two Weibo posts on the FedEx announcement: #RetaliateAgainstUSTradeBullying and #ChinaUSTrade.