China has imposed sanctions on five US-linked subsidiaries of South Korean shipbuilder Hanwha Ocean, escalating trade tensions with the US.
The move, announced on 14 October, caused a sharp drop in the company’s share price.
China’s Commerce Ministry announced the sanctions on the same day both China and the US introduced new port fees aimed at each other’s vessels, though China made an exception for ships it built, reported media.
According to the ministry, Chinese organisations and individuals are now banned from doing business or cooperating in any way with the affected Hanwha subsidiaries.
“Hanwha Ocean’s US-related subsidiaries have assisted and supported the US government’s relevant investigative activities, thereby jeopardising China’s sovereignty, security, and developmental interests,” the ministry’s statement read.
Hanwha Ocean shares fell 5.8 per cent by market close following China’s announcement, while rival HD Hyundai Heavy dropped 4.1 per cent.
Hanwha said via email that it is keeping a close watch on how the sanctions might affect its business, and said it remains committed to customer support, “including through our investments in the U.S. maritime industry and via Hanwha Philly Shipyard“.
South Korea’s foreign ministry said it is assessing the impact of China’s sanctions and plans to work with China, other ministries, and industry partners to reduce any negative effects.
Earlier this year, Hanwha announced a $5 billion investment in Philly Shipyard, which it bought in 2024 for $100 million. The move followed South Korea’s broader pledge to invest up to $150 billion in support of efforts to help the US rebuild its shipbuilding industry.
The US, under former President Donald Trump, has called on allies like Japan and South Korea to support its efforts to revitalise a shipbuilding sector that has fallen behind China, particularly in producing warships.
Hanwha’s main domestic competitor, HD Hyundai Heavy Industries, the world’s largest shipbuilder, is also reportedly in talks to acquire US shipyards, according to a media report in September.
Earlier this August, the US and China agreed to extend their current tariff suspension November, delaying steep duty increases that could severely impact bilateral trade flows and global supply chains.
