China sanctions 5 American units of the Hanwha Ocean shipbuilder following an investigation led by Washington
HONG KONG– HONG KONG (AP) — China’s Commerce Ministry said Tuesday it is banning transactions between Chinese companies and five subsidiaries of South Korean shipbuilder Hanwha Ocean, in Beijing’s latest blow to U.S. President Donald Trump’s efforts to rebuild the industry in America.
The ministry also said it was also investigating a Washington-led probe into China’s growing dominance in global shipbuilding and threatened more retaliatory measures. He said the U.S. investigation endangered China’s national security and its maritime industry and cited Hanwha’s involvement in the probe.
The U.S. Trade Representative launched a Section 301 trade investigation in April 2024. It determined that China’s power in the sector was a burden on U.S. businesses.
“China has just militarized shipbuilding,” said Kun Cao, deputy managing director at consultancy Reddal. “Beijing signals it will hit third-country companies that help Washington counter China’s maritime dominance.”
International shipping and shipbuilding constitute yet another area of friction between Washington and Beijing. Each side imposed new port taxes on the other’s ships, which took effect Tuesday.
Shares of Hanwha Ocean traded in South Korea fell more than 8% on Tuesday.
The company said via email that “Hanwha Ocean is aware of the announcement made by the Chinese government and is closely reviewing its potential commercial impact on the company.”
The sanctioned entities are Hanwha Shipping LLC, Hanwha Philly Shipyard Inc., Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC and HS USA Holdings Corp.
A truce in the trade war between the world’s two largest economies appears to have broken down after US President Donald Trump threatened to impose new 100% tariffs on imports from China, expressing frustration over new Chinese controls on rare earth exports.
The escalating antagonism has raised doubts about whether a planned meeting at the end of the month between Trump and Chinese leader Xi Jinping will take place. But Beijing said on Tuesday that China and the United States held working-level negotiations on Monday and maintained communication.
South Korea and the United States have forged closer ties in shipbuilding in response to China’s dominance as the world’s largest shipbuilder.
In late 2024, Hanwha acquired the Philly Shipyard in Pennsylvania for $100 million. It announced plans in August to invest $5 billion in new docks as part of its support for U.S. efforts to restore globally competitive shipbuilding capacity.
Last year, Hanwha Ocean also secured contracts with the U.S. Navy to perform maintenance, repair and overhaul work on U.S. Navy ships.
China said its new port taxes would apply to ships owned by U.S. companies or other entities or individuals, those operated by U.S. entities, including those with a U.S. ownership stake of 25% or more, U.S.-flagged ships, and ships built in the United States, in many ways mirroring U.S. port taxes on Chinese ships.
American companies represent only 2.9% of the global fleet in terms of capacity and 0.1% of global shipbuilding tonnage. Trump has pledged to help rebuild the industry as part of his broader efforts to grow U.S.-based manufacturing.
Hanwha Ocean announced in May that it was withdrawing from a joint venture in China.
