China sanctiones five U.S. subsidiaries of Hanwha Ocean for aiding U.S. probes into its shipping sector

China hit back Tuesday by sanctioning five U.S.-based subsidiaries of South Korea’s Hanwha Ocean, sending shares of the shipbuilder tumbling over 8% in Seoul.

The Chinese government said the action was triggered by Hanwha’s alleged support for U.S. investigations into China’s maritime and shipbuilding sectors.

The blacklisted firms are Hanwha Shipping LLC, Hanwha Philly Shipyard Inc., Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC, and HS USA Holdings Corp. These sanctions took effect immediately and block all Chinese businesses and individuals from working with them. China’s Commerce Ministry said the measure was taken to “safeguard sovereignty and national security.”

A spokesperson from China’s Ministry of Commerce (Mofcom) stated, “Hanwha’s subsidiaries in the U.S. have assisted and supported the U.S. government’s probes and measures against Chinese maritime, logistics, and shipbuilding sectors. China is strongly dissatisfied and resolutely opposes it.” The quote was translated and published by CNBC.

Linda Johnson, spokesperson for Hanwha USA, responded in a short statement: “We are aware of the announcement by the Chinese Ministry of Commerce, and we are currently reviewing the details. Hanwha will continue to provide world-class maritime services to our customers, including through our investments in the U.S. maritime industry and via Hanwha Philly Shipyard.”

Beijing adds port fees and targets rare earth exports

Hours before announcing the sanctions, China said it had started collecting new port fees on all vessels linked to the United States. The charge stands at 400 yuan—roughly $56 per net ton—and kicked in Tuesday at 12:01 a.m. EDT, exactly when the U.S. began imposing steep port fees on Chinese ships.

China-built vessels will not be subject to these fees, according to Beijing. That gives a loophole to ships made in China, but it hits American shipping firms hard. Container ships vary between 50,000 to 220,000 tons, so this isn’t small money.

At the same time, China has expanded its blacklist of American companies and pushed forward a new rare earth export restriction framework. This comes as a direct reply to U.S. President Donald Trump threatening 100% additional tariffs on Chinese goods. In return, Beijing said its rare earth move was “legitimate.”

There’s also a separate front now. China’s Ministry of Transport opened a full investigation into how the U.S. Section 301 probe is affecting China’s shipping and shipbuilding industries. That probe is the same one the sanctioned Hanwha subsidiaries are accused of aiding.

Beijing said the investigation will focus on whether any companies, individuals, or groups helped the U.S. enforce “discriminatory restrictive behaviours” against the China-linked shipping supply chain.

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