Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
China has added five US subsidiaries of South Korean shipbuilder Hanwha Ocean to its sanctions list for allegedly co-operating with American efforts to impose punitive fees on Chinese vessels that took effect on Tuesday.
Beijing said the measures against the South Korean companies, which come as tensions have flared up anew in trade talks with Washington, were part of a wider probe into entities that have allegedly assisted US actions against China’s dominance of global shipbuilding.
China’s ministry of commerce said on Tuesday it had enacted its anti-foreign sanctions law against Hanwha’s US units, sending the Korean group’s shares down as much as 8 per cent.
“[Hanwha Ocean’s] US subsidiaries assisted and supported the US government in conducting the . . . investigation and taking measures against China’s maritime, logistics and shipbuilding sectors,” the ministry said.
It said the listing prohibited “organisations and individuals within Chinese territory from engaging in related transactions and co-operation” with Hanwha.
China’s retaliation against the US measures, which include steep fees on Chinese built and owned vessels visiting American ports, comes as Beijing has stepped up its trade war against Washington, imposing sweeping new restrictions on rare earth exports last week.
US Treasury secretary Scott Bessent on Tuesday accused China of trying to damage the world’s economy after Beijing expanded export controls, which he warned would hurt the Chinese economy most.
With US companies accounting for 0.1 per cent of global shipbuilding, according to the Center for Strategic and International Studies think-tank, analysts said Beijing had targeted a South Korean company which has promised to play a prominent role in reviving the American shipbuilding sector.
Hanwha last year acquired the Philly Shipyard in Philadelphia as part of its plan to enter the US shipbuilding market.
It was also the first Korean shipbuilder to secure contracts for maintenance, repair and overhaul work on American naval vessels in South Korea.
South Korea, whose shipbuilders account for just over 29 per cent of the global market according to CSIS, has pledged $150bn to a so-called “Make America Shipbuilding Great Again” initiative as part of stalled trade talks between Washington and Seoul.
Hanwha Ocean declined to comment on the Chinese sanctions.
The US charges on Chinese-owned or built ships carrying cargo to US ports are part of an effort to increase pressure on China over what Washington argues are unfair trade practices that have helped it dominate the global shipping industry.
The measures are also aimed at boosting the domestic manufacturing of ships but have caused alarm among US exporters.
Beijing has responded with retaliatory measures against ships owned or partly owned by American investors, potentially further raising the cost of agricultural exports.
In a research report, HSBC analysts said that, while the US’s direct role in global commercial shipping is small, the Chinese rules extended to third country vessels owned and operated by entities that have financial ties to the US.
The Chinese measures against Hanwha come as the ministry of commerce on Tuesday sounded a more conciliatory note on trade talks with the US. In another statement, the ministry called on Washington to “take steps towards co-operation” with Beijing.
