On Tuesday, October 14, 2025, China made a significant announcement: it would impose sanctions on five U.S.-affiliated subsidiaries of the prominent South Korean shipbuilder, Hanwha Ocean. This bold move immediately triggered a sharp decline in Hanwha’s share prices and further amplified the ongoing trade tensions between the world’s two largest economic powers.
The Chinese Commerce Ministry revealed these new measures on the very same day both China and the U.S. began implementing additional port fees on each other’s shipping vessels. Notably, China included an exemption for ships built within its own borders.
A ministry statement clarified that all Chinese organizations and individuals are now strictly forbidden from conducting any transactions, cooperation, or related activities with the affected Hanwha entities.
Beijing justified its actions by stating that “Hanwha Ocean’s U.S.-related subsidiaries have assisted and supported the U.S. government’s relevant investigative activities, thereby jeopardizing China’s sovereignty, security, and developmental interests.” The statement, however, did not provide further details on these activities.
Hanwha Ocean has not yet released a statement or responded to inquiries regarding China’s new sanctions.
This development follows Hanwha’s announcement in August of a substantial $5 billion additional investment in the Philly Shipyard, which it purchased in 2024 for $100 million. This investment was made in the wake of South Korea’s pledge of up to $150 billion to aid the United States in revitalizing its struggling domestic shipbuilding industry.
The Trump administration had previously highlighted the critical need for assistance from allies like Japan and South Korea to reinvigorate the U.S. shipbuilding sector, which currently trails China, particularly in the production of warships.
Adding to the competitive landscape, Hanwha’s primary domestic competitor, HD Hyundai Heavy Industries – the world’s largest shipbuilder – was reported by Reuters in September to be actively pursuing discussions with several companies to acquire U.S. shipyards.
Interestingly, Hanwha itself operates a shipyard in Shandong, China, where it manufactures ship components. These modules are then transported to its South Korean shipyard for final assembly, as per company filings.
Following China’s announcement of countermeasures, Hanwha Ocean’s shares plummeted by 5.3% by 0417 GMT, while HD Hyundai Heavy also saw a 4.4% drop.
Earlier this year, the Trump administration had unveiled plans to impose fees on China-linked vessels. The stated objectives were to diminish Beijing’s influence over the global maritime industry and to strengthen American shipbuilding capabilities.
In retaliation, China announced last week that it would levy its own port fees on U.S.-linked vessels, effective the same day the U.S. fees were to be implemented.
Beijing has consistently condemned U.S. measures targeting its maritime, logistics, and shipbuilding industries, characterizing them as grave violations of international law and fundamental principles of international relations.