FedEx announced on Monday it is suing the U.S. Commerce Department over export restrictions following recent shipment errors involving Huawei packages.
FedEx CEO Fred Smith told Fox News on Monday that shipping regulations are creating an “impossible burden” for the shipping giant.
“The increasing use of restrictions on exports and imports by the Commerce Department and various geopolitical and trade disputes creates just an impossible burden on FedEx and common carriers because, under the Department of Commerce's regulations, we are expected to be policemen for these export and import controls,” he told Bret Baier.
However, Commerce Secretary Wilbur Ross on Wednesday said the shipping company's chief executive doesn't understand the law.
“I have a great deal of respect for Fred but he, frankly, is misinterpreting the regulations,” Ross told FOX Business’ Maria Bartiromo. “What the regulations simply say is that neither FedEx nor any other common carrier can knowingly carry goods that are in violation of the rules -- knowingly. That means they have to know that they are in violation.”
“We're not asking Fred or anyone else to be a policeman. We're just asking them not to conspire with people to avoid the things. So we look forward to dealing with that matter in the litigation. I think it's unfortunate that he has misinterpreted the rules. The courts will not misinterpret,” he added.
When Bartiromo asked how FedEx is “supposed to know” what technology exists in its deliveries and where it comes from, Ross responded: “They don't have to know, it just is, they have to not know that it's a violation.”
“The regulation says you cannot knowingly ship it. They do have mechanisms for trying to understand and they use them,” he said, adding that “this is not new.”
“There are over 100 entities that are on the list. So it isn't as though this suddenly came out of the blue with Huawei. These processes have been going on for years. FedEx has pretty well complied with them over the years. I think this is a tempest in a teapot,” Ross explained.
Ross added that he spoke with Smith before he filed the lawsuit.
"He gave me a wake-up call, heads-up call, just before he filed. Then I tried to explain to him that he was misinterpreting the regulations. But they went ahead and filed. So this will get itself dealt with," the Commerce secretary said.