US-China trade tensions spread to the shipbuilding industry, Hanwha Ocean is affected

Accordingly, the Chinese Ministry of Commerce said it has applied sanctions against five US entities related to Hanwha Ocean - one of South Korea's leading shipbuilding corporations.

The announcement comes just days after the US expanded controls targeting Chinese companies in the transportation and defense industries, a move that has escalated trade tensions between the world’s two largest economies.

Hanwha Ocean shares fell as much as 8% in Seoul - the biggest drop in about two months - as investors worried about the impact of geopolitical tensions on the company's business and supply chain.

The moves are a significant escalation in a long-running dispute between the world’s two largest economies over maritime dominance. They come after tensions between the US and China escalated in recent weeks as President Donald Trump threatened to impose 100% tariffs on Chinese imports in response to new export controls.

Retaliatory tariffs on US-owned ships docking in China officially took effect on October 14. China’s new restrictions prohibit any individuals or organizations from conducting transactions with the five listed companies, raising concerns across the global shipping industry.

According to the announcement of China's Ministry of Transport, ships owned or directly or indirectly held by US enterprises, organizations or individuals with 25% or more of shares, as well as any ships flying the US flag or built in the US, are subject to the fees.

In contrast, ships built in China in the above-mentioned groups will be exempted, along with non-cargo ships entering China only for repairs or other special exemptions.

The special port charges will be applied in a gradual manner: starting at 400 yuan (about $56) per net ton, starting from October 15, and will be adjusted upward annually on April 17 for the next three years.

China's Ministry of Transport also said it is investigating the impact of the US Trade Representative's (USTR) Section 301 investigation on China's maritime sector, and may take additional countermeasures in the future.

The dispute could have a negative impact on the global economy, as ships are involved in 80% of global trade. In April, the US announced plans to curb China’s shipbuilding capacity even as it seeks to boost its own. This has caused Chinese shipyards to lose market share, while Chinese shipping lines face high fees when calling at US ports.

At the same time, Korean shipbuilders are seeking to strengthen cooperation with the United States to support the US shipbuilding industry revival. Hanwha Ocean is the first Korean shipyard to acquire a US shipyard, and is working to transfer technology and technical expertise to the US market as the two countries strengthen cooperation in the defense and maritime industries.

Accordingly, the five companies put on China's restricted list are Hanwha Shipping, Hanwha Philly Shipyard, Hanwha Ocean USA International, Hanwha Shipping Holdings and HS USA Holdings.