China Targets Hanwha OceanS U.S. Subsidiaries Amid Intensifying Trade Disputes
Shares of South Korea’s prominent shipbuilding firm Hanwha Ocean experienced a sharp decline exceeding 8% after China announced sanctions against five of its American branches. This advancement marks a significant escalation in the ongoing trade tensions between Beijing and Washington,particularly concerning investigations into China’s maritime sector.
Overview of Sanctioned U.S. Subsidiaries
The Chinese government has imposed restrictions on the following entities: hanwha Shipping LLC, Hanwha Philly shipyard Inc., Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC, and HS USA Holdings Corp. According to statements from china’s Ministry of Commerce, these subsidiaries are accused of aiding U.S. governmental inquiries aimed at curbing Chinese activities in shipping, logistics, and shipbuilding industries.
China’s Response to Alleged Interference
A representative from the Ministry of Commerce condemned these subsidiaries for their participation in what Beijing describes as hostile actions against its maritime enterprises. The official declaration underscored China’s firm opposition to such interference and announced immediate prohibitions preventing Chinese individuals and organizations from conducting business with the sanctioned companies.
Escalating Port Fee Disputes Amplify Bilateral Strains
The sanction proclamation coincides with reciprocal port fee hikes enacted by both nations on each other’s vessels. Beginning September 16, 2024, ships affiliated with U.S.-linked companies docking at Chinese ports will incur an extra charge of 400 yuan (around $56) per net ton-except for vessels built within China.
This measure follows earlier action by the United states that same day when it raised fees on Chinese-flagged ships entering American harbors starting at midnight EDT. Considering that container ships often weigh between 50,000 to over 200,000 tons fully loaded, these additional levies impose substantial financial pressure on operators navigating transpacific shipping lanes.
Wider Trade Context: Rare Earth Export Controls and Blacklists
This port fee conflict is part of a broader pattern where Beijing has tightened export controls on rare earth minerals-essential components for electronics manufacturing and defence systems-and expanded blacklists targeting various American corporations amid escalating trade frictions.
The united States has responded by threatening to double tariffs on numerous imports from China; meanwhile, Beijing defends its rare earth export restrictions as necesary national security measures rather than retaliatory tactics.
Inquiry Into Foreign Roles in Maritime Restrictions
Together, China’s Ministry of Transport launched an investigation into how Washington’s Section 301 probe impacts China’s shipping industry overall. The inquiry seeks to determine whether foreign firms or individuals have contributed to discriminatory practices undermining China’s maritime supply chains during this period of heightened scrutiny.
The Scale and Impact Within Global Shipping Operations
An illustrative example highlights the magnitude involved: ultra-large container vessels like maersk’s latest Triple-E class can transport over 18,000 twenty-foot equivalent units (TEUs), weighing approximately 165,000 tons when fully loaded.Under new tariff regimes or port charges calculated per net tonnage basis-as seen recently-such fees could amount to millions in extra costs each time these massive ships dock at ports affected by bilateral disputes.
