China sanctions 5 US units of SKorean shipbuilder

Hong Kong, Oct. 15: China's Commerce Ministry said Tuesday it was banning dealings by Chinese companies with five subsidiaries of South Korean shipbuilder Hanwha Ocean in the latest swipe by Beijing at U.S. President Donald Trump's effort to rebuild the industry in America.

The ministry also announced that it was investigating a probe by Washington into China's growing dominance in world shipbuilding, and threatened more retaliatory measures. It said the U.S. probe endangers China's national security and its shipping industry and cited Hanwha's involvement in the investigation.

The U.S. Trade Representative launched the Section 301 trade investigation in April 2024. It determined that China's strength in the industry was a burden to U.S. businesses.

"China just weaponized shipbuilding," said Kun Cao, deputy chief executive at consulting firm Reddal. "Beijing is signaling it will hit third-country firms that help Washington counter China's maritime dominance."

International shipping and shipbuilding have yet another areas of friction between Washington and Beijing. Each side has imposed new port fees on each others' vessels that took effect on Tuesday.

South Korea and the U.S. have been building closer ties in shipbuilding in response to China's dominance as the world's largest shipbuilder.

In late 2024, Hanwha Ocean acquired the Philly Shipyard in Pennsylvania for $100 million. It announced in August that it plans to invest $5 billion in new docks and quays as part of its support for U.S. efforts to restore globally competitive shipbuilding capacity.

Last year, Hanwha Ocean secured contracts with the U.S. Navy to perform maintenance, repair and overhaul work for U.S. naval vessels.

The company said via email that "Hanwha Ocean is aware of the announcement made by the Chinese government and is closely reviewing its potential business impact on the company."

Hanwha Ocean's shares traded in South Korea fell as much as over 8% on Tuesday, closing 5.8% lower.

In a statement to The Associated Press, South Korea's Foreign Ministry said the Seoul government was assessing how the sanctions might affect the Hanwha companies and related South Korean industrial sectors. (AP)