hong kong — HONG KONG (AP) — China’s Commerce Ministry said Tuesday it is banning Chinese companies’ dealings with five subsidiaries of South Korean shipbuilder Hanwha Ocean, the latest criticism from Beijing of U.S. President Donald Trump’s efforts to rebuild the industry in America.
The department also announced it was also investigating a Washington investigation into China’s growing dominance of the global shipbuilding industry and threatened further retaliatory measures. She said that the US investigation endangers China’s national security and the Chinese shipping industry, and pointed to Hanwha’s involvement in the investigation.
The US Trade Representative launched the Section 301 trade investigation in April 2024. It determined that China’s power in industry was a burden on US companies.
“China has weaponized shipbuilding,” said Con Cao, executive vice president of Rydal Consulting. “Beijing signals it will strike third-country companies that help Washington counter China’s maritime dominance.”
There are other areas of friction between Washington and Beijing in the field of international shipping and shipbuilding. Each side was imposed New port fees on each other’s ships, which took effect on Tuesday.
Hanwha Ocean shares traded in South Korea fell more than 8% on Tuesday.
The company said Tuesday via email that it was reviewing the situation.
The sanctioned entities are Hanwha Shipping LLC, Hanwha Philly Shipyard Inc., Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC, and HS USA Holdings Corp.
The truce in the trade war between the world’s two largest economies appears to have collapsed after US President Donald Trump. Threatened with new 100% tariffs on imports from China, expressing frustration over new Chinese export controls on rare earths.
The escalation in hostilities has raised doubts about whether Trump and Chinese leader Xi Jinping will go ahead with the meeting scheduled for late this month. But Beijing said on Tuesday that China and the United States held working-level talks on Monday and maintained contacts.
South Korea and the United States are working to build closer shipbuilding relations in response to China’s dominance as the world’s largest shipbuilder.
In late 2024, Hanwha Acquired Philly Shipyard in Pennsylvania for $100 million. It announced in August that it plans to invest $5 billion in new docks and berths as part of its support for US efforts to restore global shipbuilding competitiveness.
Last year, Hanwha Ocean also secured contracts with the US Navy to perform maintenance, repair and overhaul work on US Navy ships.
China said the new port duties will apply to ships owned by US companies or other entities or individuals, those operated by US entities including those with a US stake of 25% or more, US-flagged ships and US-built ships, mirroring in many respects US port duties on Chinese ships.
US companies account for only 2.9% of global fleet ownership by capacity and 0.1% of global shipbuilding tonnage. Trump has pledged to help rebuild the industry as part of his broader campaign to expand manufacturing in the United States.
Hanwha Ocean said in May that it would withdraw from a joint venture in China.