By Liz Lee, Yukun Zhang and Heejin Kim
BEIJING/SEOUL (Reuters) -China announced sanctions on Tuesday against five U.S.-linked subsidiaries of South Korean shipbuilder Hanwha Ocean amid trade tensions between the world’s two largest economies, sending the company’s shares sharply lower.
The move, announced by the Chinese commerce ministry, comes on the day that China and the U.S. implement additional port fees targeting each others’ vessels, although China has exempted ships it built.
Organisations and individuals within China are prohibited from engaging in any transactions, cooperation or related activities with these Hanwha entities, the ministry said in a statement.
“Hanwha Ocean’s U.S.-related subsidiaries have assisted and supported the U.S. government’s relevant investigative activities, thereby jeopardising China’s sovereignty, security, and developmental interests,” the statement said, without elaborating.
Hanwha did not immediately respond to a Reuters request for comment.
In August, Hanwha announced a $5 billion additional investment on the Philly Shipyard, which it acquired in 2024 for $100 million, after South Korea pledged to inject as much as $150 billion to help the U.S. revive its domestic industry.
President Donald Trump’s administration has said the U.S. needs help from allies Japan and South Korea to revitalise the troubled shipbuilding sector, which is lagging behind China, especially for manufacturing warships.
Hanwha’s domestic rival HD Hyundai Heavy Industries, the world’s largest shipbuilder, is also in talks with multiple companies to acquire U.S. shipyards, Reuters reported in September.
Hanwha runs a shipyard in Shandong, China, that builds modules of ship components, according to a company filing. Hanwha supplies the modules to its shipyard in South Korea for the final assembly, according to the firm.
Shares of Hanwha Ocean tumbled 5.3% at 0417 GMT after China announced the countermeasures. HD Hyundai Heavy slipped 4.4%.
The Trump’s administration announced earlier this year plans to levy fees on China-linked ships to loosen Beijing’s grip on the global maritime industry and bolster U.S. shipbuilding.
China hit back last week saying it would impose its own port fees on U.S.-linked vessels on the same day then U.S. fees come into effect.
China has called U.S. measures targeting its maritime, logistics, and shipbuilding industries a serious violation of international law and fundamental norms of international relations.
(Reporting by Liz Lee, Yukun Zhang and Heejin Kim; Editing by Jacqueline Wong and Kim Coghill)
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