CCTV Transcripts

CCTV Script 26/06/19

— This is the script of CNBC's news report for China's CCTV on June 26, 2019, Wednesday.

One of the big pieces of context in which FEDEX is suing the Commerce Department, is a Commerce Department rule that says: FEDEX must certify that the shipper complies with U.S. export regulations. Once a shipment is found to be faulty, FEDEX can be fined $250,000 without any legal process. In an interview with fox television, Frederick W. Smith, the chief executive of FEDEX, expressed frustration.

Frederick said: Facing with the threat of huge fines from the US department of commerce, FEDEX has to check every package by itself, seeing whether any of them complies with US import and export regulations. More recently, the Commerce Department has increasingly restricted imports and exports in a variety of geopolitical and trade disputes, placing an intolerable burden on FEDEX and other express carriers.

Frederick insists that FEDEX has had enough of this, so it will sue the Commerce Department, hoping for a court waiver. Frederick said he did not believe the Commerce Department's rule was based on law, and that FEDEX wanted the department to come up with a solution, because the express carriers are not police of regulating imports and exports.

FEDEX is under big international pressure after it apologized for twice making "mistakes" with packages from China's Huawei. But the Commerce Department's statement did not mention Huawei. Frederick said the Huawei case showed the regulatory confusion caused by tighter US import and export restrictions.

In an overnight earnings call, Frederick reiterated that there were about 1,100 entities on the Commerce Department's control list, and on last Friday, five more companies were added. And it is these five companies, became the final straw that broke the nerve of FEDEX. So it decided to sue the Commerce Department. For FEDEX, the move was a desperate attempt to survive. Take a look at the company's stock, which has fallen sharply this year and is now down nearly 40% from its September peak, far more than its peers. Accordingly, the market pressure that FEDEX bears is tremendous. If the company loses overseas market due to the pressure of fines from Commerce Department, it will face even more negative growth prospects. We will keep an eye on this issue.