The Chinese government has imposed sanctions on shipbuilder Hanwha Ocean, a key company in Korea–U.S. shipbuilding cooperation. In response, the presidential office said it is “engaging in communication and coordination through Korea–China trade channels to minimize potential damage.”

China’s Ministry of Commerce said on October 14 that it would publish a “Decision on Countermeasures Against Five U.S. Subsidiaries of Hanwha Ocean” in retaliation for “the U.S. Section 301 trade investigation into China’s maritime, logistics, and shipbuilding industries.”

The sanctions target five U.S. subsidiaries of Hanwha Ocean—Hanwha Shipping, Hanwha Philly Shipyard, Hanwha Ocean USA International, Hanwha Shipping Holdings, and HS USA Holdings.

Among them, Hanwha Philly Shipyard is particularly symbolic as it was Hanwha Group’s first overseas shipyard acquisition, purchased last year for US$100 million, and represents the Korea–U.S. shipbuilding cooperation project “MASGA” (Make American Shipbuilding Great Again).

Under the sanctions, Chinese companies and individuals are prohibited from trading or cooperating with the designated entities. The Chinese government said Hanwha Ocean’s U.S. subsidiaries “supported and cooperated with the U.S. government’s trade investigation, thereby harming China’s sovereignty, security, and development interests.”

Earlier, in February, the U.S. Trade Representative (USTR) proposed a plan to impose port-entry fees under Section 301 of the Trade Act, and Hanwha Ocean expressed its support during a public hearing in March. Observers say China’s latest move is a retaliatory response to that stance.

Starting today, the U.S. government began levying port-entry fees of $50 per net ton on vessels owned or operated by Chinese companies, a rate scheduled to rise to $140 per ton by 2028.

The presidential office said in a media briefing that it will “need to comprehensively assess whether China’s measures will affect the MASGA project.”

The presidential office added that “since Hanwha has limited transactions with Chinese companies, the immediate impact appears minimal.” It also said that “while it is difficult to predict the possibility of further sanctions, the situation will be closely monitored.”

In Korea’s shipbuilding and shipping industries, concerns are growing that China may use its dispute with the U.S. as a pretext to pressure Korea in sectors beyond shipbuilding.

An shipbuilding industry official said, “Hanwha does operate block-manufacturing facilities in China, but those blocks aren’t exported to the U.S.,” adding that “this appears to be largely a symbolic move rather than one that will cause short-term business disruptions.”

Yang Jong-seo, senior researcher at the Export-Import Bank of Korea’s Overseas Economic Research Institute, said, “Shipbuilding is regarded by both the U.S. and China as a national security industry. If security-related tensions deepen, this may go beyond simply saying ‘don’t deal with each other.’” He added, “Korean and Chinese shipbuilders are both competitors and partners. If U.S.–China conflict escalates further, cooperation with the U.S. could also contract.”

Analysts view China’s latest sanctions as a warning shot aimed at Korea, which has been strengthening its cooperation with the U.S. in shipbuilding.

A business community official commented, “Since Hanwha acted in the national interest and has now become a victim of the U.S.–China conflict, the government should step in with support and countermeasures.”

On the same day, Hanwha Ocean’s stock closed at 103,100 won, down 5.76 percent from the previous day.