China Sanctions U.S. Subsidiaries of Hanwha Amid Rising Shipping Dispute
Tit-for-tat port fees escalate tensions between Beijing and Washington, raising broader geopolitical stakes
ERBIL (Kurdistan24) — China on Tuesday imposed sanctions on five American subsidiaries of South Korean shipbuilder Hanwha Ocean, accusing them of assisting a U.S. government investigation into the global shipping industry. The move coincided with the imposition of reciprocal port fees by both nations, further escalating tensions in a key sector of global trade.
The sanctioned entities include Hanwha Shipping LLC, Hanwha Philly Shipyard Inc., Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC, and HS USA Holdings Corp.
Beijing claimed that these subsidiaries “assisted and supported the relevant investigation activities of the U.S. government, endangering China’s sovereignty, security, and development interests.” Chinese firms and individuals are now barred from cooperating with the companies.
The dispute stems from a U.S. “Section 301” investigation, announced in April, which found that China’s dominance of the shipping sector—responsible for nearly half of all newly launched ships globally—was “unreasonable” and damaging to U.S. interests. In response, Washington applied fees to all arriving Chinese-built and operated vessels. Beijing retaliated last week with its own “special port fees” on U.S. ships arriving in Chinese ports, with both measures taking effect simultaneously on Tuesday.
China’s Ministry of Transport also announced a probe into whether the Section 301 investigation had compromised the “security and development interests” of China’s shipbuilding industry and supply chain, signaling that more U.S.-linked companies could face restrictions.
The commerce ministry characterized the U.S. measures as “typical unilateralist and protectionist actions” constituting “unfair competition,” while urging Washington to resolve issues through dialogue.
For Hanwha, one of South Korea’s largest shipbuilders, the dispute comes after the company announced a $5 billion investment in Philadelphia Shipyard in August, signaling deeper U.S. ambitions to expand domestic shipbuilding capacity.
Washington has framed its port fees as a tool to encourage domestic ship production and counter China’s dominant role in the industry, which it argues threatens economic and national security interests.
Experts say the escalating dispute reflects broader strategic tensions between China and the West. Shipping is a critical global infrastructure, and control over shipbuilding and port operations carries both economic and military significance.
Beijing’s sanctions and reciprocal fees are likely to complicate supply chains and could encourage other Asian nations to recalibrate trade and investment policies in response to growing U.S.-China economic friction.
The development signals the intensifying geopolitical competition between the U.S. and China, where economic instruments like tariffs, port fees, and sanctions are increasingly being used as levers of strategic influence.
The Hanwha sanctions also illustrate the growing intersection of multinational corporate activity and international politics. As U.S.-linked firms expand operations in key sectors, Beijing is increasingly asserting its influence to protect domestic industrial and strategic interests, signaling a willingness to target third-party companies caught between the two powers.
Observers warn that unless both sides step back from unilateral measures, this tit-for-tat escalation could ripple across the global shipping industry, affecting freight rates, investment flows, and broader trade dynamics between Asia and the West.
The episode underscores how economic disputes are now inseparable from geopolitical rivalry, particularly as China, South Korea, and the U.S. vie for influence over strategic industries.
