Trump official cautions China against penalising firms investing in US

Greer's warning comes amid ongoing US-China maritime disputes, with China controlling over half the world's shipbuilding and seeking greater influence in the South China Sea

By Laura Curtis

 

The Trump administration warned China not to retaliate against foreign companies helping the US to develop critical industries, after Beijing last week sanctioned the US units of a South Korean shipping giant over its plans to invest in the American maritime sector. 

“China’s recent retaliatory actions against private companies across the globe is part of a broader pattern of economic coercion to influence American politics and control global supply chains by discouraging foreign companies from investing in America’s shipbuilding and other critical industries,” US Trade Representative Jamieson Greer said in a statement Monday.

 

Greer’s warning is the latest step in a long-standing series of maritime disputes between the US and China, which accounts for more than half of the world’s shipbuilding and has sought in recent years to increase its control of the critical South China Sea. The battle has implications for the global economy, as vessels are responsible for moving more than 80 per cent of international trade.

 

While the US maintains the world’s most powerful navy, it has comparatively minimal shipbuilding capabilities. As such, the Trump administration has sought to bolster US shipbuilding by inviting investment from South Korea, the world’s second-largest shipbuilder.

 

The sanctions China announced last week hit at that effort directly — prohibiting people or organizations in China from transacting with US units of South Korea’s Hanwha Ocean Co., while threatening further retaliatory measures on the industry. 

 

“Attempts at intimidation will not stop the United States from rebuilding its shipbuilding base and responding appropriately to China’s targeting of critical industrial sectors for dominance,” Greer said.

 

It’s far from the only example. Both sides have slapped special port fees on each other’s commercial vessels, which took effect last week. The US is also set to levy a 100 per cent tariff on Chinese imports of essential port equipment and floated a 150 per cent import tax on other cargo handling equipment. Trump has sought to minimize Chinese companies’ control of critical global ports, including around the Panama Canal. 

 

Shipping is one of several points of contention in the China-US relationship that has kept global investors on edge in recent days. Beijing has tightened export controls on rare earths among other measures, while the US has expanded curbs on China’s access to chips and threatened the country with additional 100 per cent tariffs. 

 

Earlier Monday, President Donald Trump said he anticipated discussing China’s territorial ambitions regarding the self-governing island of Taiwan when he meets with his counterpart, Xi Jinping, next week at the Asia-Pacific Economic Cooperation summit in South Korea. The president sidestepped questions about whether he expected China to link trade concessions in exchange for Taiwan-related asks.