Hanwha Ocean Reviewing Business Impact After China Announces Sanctions

China Retaliates Against U.S. Port Fees with "Trade Ban"
Five Hanwha Ocean U.S. Subsidiaries Added to Sanctions List
Potential Impact on Korea-U.S. Shipbuilding Cooperation, Including Hanwha Philshipyard

The fallout from the U.S.-China trade conflict has reached the South Korean shipbuilding industry. China, in retaliation against U.S. sanctions on its shipbuilding sector, has included five U.S. subsidiaries of Hanwha Ocean in its list of sanctioned entities. As a result, South Korean companies operating shipyards in the United States have found themselves caught in the crossfire of this major power struggle.

On the 14th, the Chinese Ministry of Commerce announced, "In response to the U.S. Section 301 investigation into China's maritime, logistics, and shipbuilding industries, we have taken countermeasures against five U.S. subsidiaries of Hanwha Ocean: Hanwha Ocean USA International, Hanwha Philshipyard, Hanwha Shipping Holdings, Hanwha Shipping, and HS USA Holdings."

On July 16 (local time), a national security multipurpose vessel is being constructed at Hanwha Philshipyard Dock 4 in Philadelphia, Pennsylvania, USA. Photo by Yonhap News Agency

This action is interpreted as a retaliatory measure against the port entry fee system that the United States has begun imposing on Chinese vessels. In April, based on the findings that China had designated its shipbuilding and shipping industries as "strategic industries" and provided them with subsidies, the United States started imposing a port entry fee of $50 per net ton on Chinese vessels as of this date. This fee is scheduled to increase to $140 by 2028.

In response, China has targeted foreign shipbuilding and shipping companies with business operations in the United States for sanctions. The U.S. subsidiaries of Hanwha Ocean, which have symbolized Korea-U.S. shipbuilding cooperation and recently gained attention as the core of the "MASGA" project, are expected to experience significant repercussions.

Regarding these measures, Hanwha Ocean issued an official statement saying, "We are aware of the Chinese government's announcement and are closely reviewing the potential business impact of these actions on our company."

Industry observers interpret this situation as China not only retaliating against U.S. sanctions but also seeking to keep the South Korean shipbuilding sector in check.

Meanwhile, Hanwha Ocean also has some subsidiaries in China, but the current sanctions are reportedly limited to its U.S. subsidiaries. The company has begun further reviews to assess any potential impact on its business operations and global supply chain in China.