Trade Tensions Rise as China Bans South Korean Shipbuilder Subsidiaries

China's Commerce Ministry has banned Chinese companies from dealing with five subsidiaries of South Korean shipbuilder Hanwha Ocean amid a US inquiry into China's dominance in shipbuilding. Tensions are escalating as both nations have imposed new port fees, deepening trade friction between them.

In a move that heightens tensions in the global shipbuilding industry, China's Commerce Ministry announced Tuesday that it has banned dealings by Chinese companies with five subsidiaries of South Korean shipbuilder Hanwha Ocean. This announcement coincides with an ongoing investigation by Washington into China's influence in the global shipbuilding sector.

The sanctions target Hanwha Shipping LLC, Hanwha Philly Shipyard Inc., Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC, and HS USA Holdings Corp. This decision comes in response to the US Trade Representative's Section 301 trade investigation, initiated in April 2024, which concluded that China's growing stronghold on the industry adversely affects US businesses.

The strained relations between Washington and Beijing have seen each side introducing new port fees on the other's vessels, exacerbating trade frictions. Amid these tensions, Hanwha acquired the Philly Shipyard in Pennsylvania for USD 100 million and announced plans to invest USD 5 billion in new docks and quays to bolster the US's shipbuilding capabilities.

(With inputs from agencies.)