China Sanctions Hanwha’s U.S.-Linked Units as Port Fee Standoff with Washington Escalates

BEIJING/SEOUL, Oct 14 (Reuters) – China announced sanctions on Tuesday against five U.S.-linked subsidiaries of South Korean shipbuilder Hanwha Ocean amid trade tension between the world’s two largest economies, sending the company’s shares sharply lower.

The commerce ministry’s move comes on the day China and the United States implement additional port fees targeting each others’ vessels, although China has exempted ships it built.

Organizations and individuals in China are prohibited from engaging in transactions, cooperation or related activities with the Hanwha units, 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 jeopardizing China’s sovereignty, security, and developmental interests,” it added, without elaborating.

Shares of Hanwha Ocean closed down 5.8% after China unveiled the steps, while peer HD Hyundai Heavy slipped 4.1%.

Hanwha did not immediately respond to a Reuters request for comment.

In a statement, South Korea’s foreign ministry said it was currently determining the impact of the sanctions, and planned to communicate with China, relevant ministries and industry to minimize their impact.

In August, Hanwha unveiled additional investment of $5 billion in the Philly Shipyard it acquired in 2024 for $100 million, after South Korea pledged to inject as much as $150 billion to help the United States revive its domestic industry.

President Donald Trump’s administration has said the United States needs help from allies Japan and South Korea to revitalize the troubled shipbuilding sector, which is lagging behind China, especially in turning out warships.

Hanwha’s domestic rival, HD Hyundai Heavy Industries, the world’s largest shipbuilder, is also in talks with companies to acquire U.S. shipyards, Reuters reported in September.

Hanwha runs a shipyard in China’s eastern province of Shandong that builds modules of ship components, a company filing showed. Hanwha supplies the modules to its shipyard in South Korea for the final assembly, according to the firm.

The Trump administration unveiled plans this year 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 that U.S. fees take effect.

China says U.S. measures targeting its maritime, logistics, and shipbuilding industries are a serious violation of international law and fundamental norms of international relations.

(Reporting by Liz Lee, Yukun Zhang and Heejin Kim; Additional reporting by Joyce Lee; Editing by Kim Coghill and Clarence Fernandez)

(c) Copyright Thomson Reuters 2025.

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