HONG KONG: China’s Commerce Ministry announced on Tuesday that it is barring Chinese firms from doing business with five US-based subsidiaries of South Korean shipbuilder Hanwha Ocean, marking Beijing’s latest retaliation against US President Donald Trump’s push to revive America’s shipbuilding industry.
The ministry also said it is launching an investigation into Washington’s ongoing probe of China’s dominance in global shipbuilding, warning that further countermeasures could follow. It argued that the US investigation poses a threat to China’s national security and maritime sector, citing Hanwha’s involvement in the case.
The US Trade Representative initiated the Section 301 trade investigation in April 2024, asserting that China’s powerful position in shipbuilding unfairly burdens US companies.
“China just weaponised shipbuilding,” said Kun Cao, deputy CEO of consulting firm Reddal. “Beijing is signalling that it’s prepared to target third-country firms helping Washington curb China’s maritime power.”
The dispute adds a new front to the widening trade tensions between Washington and Beijing. Both sides introduced new port fees on each other’s vessels effective Tuesday.
Shares of Hanwha Ocean dropped as much as 8 percent in Seoul trading following the announcement. The company said in an emailed statement that it was “reviewing the situation.”
The five sanctioned entities include Hanwha Shipping LLC, Hanwha Philly Shipyard Inc., Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC, and HS USA Holdings Corp.
The move comes amid renewed strains in US–China trade relations. A fragile truce between the world’s two largest economies appeared to collapse after President Trump threatened a 100 percent tariff on Chinese imports, citing Beijing’s new export controls on rare earths.
The escalation has cast doubt on whether Trump and Chinese President Xi Jinping will proceed with a planned meeting later this month. However, Beijing confirmed that the two sides held working-level talks on Monday and remain in contact.
South Korea and the US have strengthened cooperation in shipbuilding as part of efforts to counter China’s overwhelming dominance in the sector. In late 2024, Hanwha Ocean purchased the Philly Shipyard in Pennsylvania for USD 100 million, and in August it unveiled plans to invest USD 5 billion in new docks and quays to support US shipbuilding capacity.
Hanwha has also signed contracts with the US Navy for maintenance, repair, and overhaul work on American naval vessels.
China said its new port fees will apply to ships owned or operated by US entities—or by any entity with at least a 25 percent US stake—as well as vessels flying the US flag or built in the United States. The measures largely mirror similar fees imposed by Washington on Chinese ships.
US companies account for only 2.9 percent of global fleet capacity and 0.1 percent of worldwide shipbuilding tonnage. Trump has vowed to rebuild the sector as part of his broader effort to revive domestic manufacturing.
In May, Hanwha Ocean announced its withdrawal from a joint venture in China.
