Beijing sanctions Korean shipbuilder giant as US-China tensions escalate

China's commerce ministry accused Hanwha Ocean's US units of violating its anti-foreign sanctions law and warned of further countermeasures against countries backing discriminatory restrictions

The US-China rivalry refuses to slow down. With each passing day, both nations take retaliatory steps that heighten anxiety over the shifting world order. The latest flashpoint came on Tuesday (October 14), when Beijing sanctioned five US-based subsidiaries of South Korea’s Hanwha Ocean, accusing them of assisting Washington in enforcing trade restrictions on China’s maritime and shipbuilding sectors. China’s commerce ministry said the action blocks transactions and cooperation between organisations or individuals in China and the named entities. 

 

The sanctions come as Washington and Beijing each moved to levy special port fees on vessels with links to the other country. US rules which came into effect this week target Chinese-built, operated or owned ships. Meanwhile, China announced reciprocal special port charges to be applied to US-linked vessels. Authorities in both countries have framed the fees as responses to perceived unfair practices and national-security concerns.

 

 

US-based subsidiaries of South Korea’s Hanwha Ocean sanctioned by China are:

 

> Hanwha Shipping LLC

 

> Hanwha Philly Shipyard Inc

 

> Hanwha Ocean USA International LLC

 

> Hanwha Shipping Holdings LLC

 

> HS USA Holdings Corp

 

What is Beijing’s take on sanctions? 

A commerce ministry spokesperson accused Hanwha’s US units of acting under China’s anti-foreign sanctions law and related regulations, and warned that it would take further countermeasures against countries or regions that enact or support discriminatory bans or restrictions.

 

The move follows growing US efforts to strengthen domestic shipbuilding and restrict access to certain maritime technologies and supply chains. South Korean media and markets reported a fall in Hanwha Ocean’s share price after the announcement.

 

Beijing’s decision follows a pledge at the end of September to impose punitive measures against any state that enacts or supports discriminatory restrictions targeting Chinese operators. The current measures are the latest in a string of tit-for-tat steps between Beijing and Washington that have touched semiconductors, rare earths, export controls and now maritime trade.  ALSO RAED| Trump aide blames China for 'damaging global economy' after rare earth curb 

Size of China’s shipbuilding industry 

China, South Korea, and Japan together command the global shipbuilding sector. In 2024, China alone was responsible for roughly 60-75 per cent of new vessel orders by tonnage, while South Korea and Japan accounted for nearly the entire remaining share, with major players such as HD Hyundai and Samsung Heavy Industries continuing to dominate production.

 

The worldwide shipbuilding industry is valued at approximately $150 billion a year.

 

Why are China-US ties souring fast? 

The latest escalation comes amid a broader trade and national-security dispute. In early October US President Donald Trump announced plans for a fresh round of tariffs for China, including threatening a 100 per cent tariff on some Chinese imports and expanded export controls. 

 

The global financial markets reacted to the announcement with the US equity indexes including the Nasdaq falling sharply, and cryptocurrencies experienced a volatile sell-off as traders priced in higher trade and policy risk. Analysts say such measures will only increase uncertainty for global supply chains and investor sentiment.