China announced sanctions on Tuesday targeting five U.S.-linked subsidiaries of South Korean shipbuilder Hanwha Ocean, citing threats to its sovereignty and security. The move sent Hanwha shares down 5.8%, while domestic rival HD Hyundai Heavy slipped 4.1%.
The Chinese Commerce Ministry stated that organizations and individuals in China are prohibited from conducting transactions or cooperating with the affected Hanwha units. “Hanwha Ocean’s U.S.-related subsidiaries have assisted and supported the U.S. government’s investigative activities, thereby jeopardizing China’s sovereignty, security, and developmental interests,” the ministry said, without providing further details, News.Az reports, citing Reuters.
The sanctions come on the same day that China and the United States implemented additional port fees on each other’s vessels, though China exempted ships it built. South Korea’s foreign ministry said it is assessing the impact and plans to communicate with China and relevant industries to minimize disruption.
Hanwha Ocean has been expanding its presence in the U.S., including a $5 billion investment in the Philly Shipyard acquired in 2024. The Trump administration has sought support from allies like South Korea and Japan to bolster the U.S. shipbuilding sector, which lags behind China in warship production.
China condemned U.S. measures targeting its maritime and shipbuilding industries as a serious violation of international law and fundamental norms of international relations.