China sharply escalated maritime trade tensions Tuesday by sanctioning five American subsidiaries operating in the shipping sector and imposing new port charges on US-controlled vessels.
The measures came into effect immediately, amplifying the ongoing standoff between the world’s two largest economies and sending sector stocks and shipbuilding shares tumbling in global markets.
Hanwha Ocean, a South Korean shipbuilder with US operations, found five of its American units directly targeted in China’s latest round of trade measures.
The sanctions stem from accusations that these firms participated in US government investigations into China’s maritime industry, marking a shift in Beijing’s response strategy by drawing in multinational affiliates and allies.
Who are the US firms targeted by China’s new sanctions?
The Chinese Commerce Ministry officially sanctioned Hanwha Shipping LLC, Hanwha Philly Shipyard Inc., Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC, and HS USA Holdings Corp.
Chinese organizations and individual citizens are now prohibited from conducting business with these entities, a move that swiftly isolated the subsidiaries from one of the world’s largest shipbuilding markets.
Hanwha Ocean’s share price fell sharply on the Seoul Exchange following the announcement, closing down nearly 6 percent after briefly dropping as much as 8 percent in early trading.
The sanctions block the subsidiaries' access to Chinese capital, supply chains, and clients, complicating long-term plans to invest and expand US shipbuilding through Asian partnerships.
Did you know?
The initial Chinese fee is 400 Chinese Yuan (RMB) per net ton per voyage, and it is limited to a maximum of five voyages per vessel each year. The fee is scheduled to increase annually until 2028.
What is the scope and impact of China’s new port fees?
China introduced a special port charge of 400 yuan ($56) per net ton for US-owned, operated, flagged, or built vessels docking at Chinese ports. These fees will increase annually, peaking at 1,120 yuan per net ton by April 2028, with broad applicability to ships in which US companies have at least a 25 percent stake.
Port fees are collected at the first Chinese port visited on each journey, with a maximum of five chargeable voyages per vessel each year. Only ships built in China are exempt from the new levy.
This nuance signals incentives for shipbuilding orders to favor Chinese yards and suppliers if US companies hope to avoid surcharges.
How is China responding to Trump’s shipbuilding push?
The sanctions and port fees were introduced as presidential initiatives in Washington aimed at reviving American shipbuilding through allied partnerships.
Hanwha Ocean’s acquisition of Philly Shipyard for $100 million last year and a $5 billion facilities pledge represented cross-Pacific efforts to strengthen US maritime capacity, which now face roadblocks as a result of China’s trade clampdown.
President Donald Trump signaled further countermeasures, threatening 100 percent tariffs on Chinese goods starting in November and pushing expansive restructuring of shipping and manufacturing supply chains.
Despite these hardline policies, Treasury Secretary Scott Bessent confirmed that high-level talks between US and Chinese leaders are set to continue in the coming weeks.
ALSO READ | How Did US-China Talks Spark Crude Oil Price Recovery?
What are the broader economic effects of this escalation?
Trade escalation sent ripples across global financial markets on Tuesday. US stock indices fell, with the Dow Jones Industrial Average declining by more than 500 points as investor uncertainty increased.
The maritime industry, which relies on stable cross-border trade and predictable port access, now faces increased costs and regulatory barriers that could impact shipping times and reliability worldwide.
The Chinese Transport Ministry also announced a probe into US policies affecting Chinese shipping, indicating that further retaliatory actions may follow.
Companies tied to American investments face heightened risks, making contingency planning and diversification increasingly crucial for international logistics managers.
What could happen next in US-China maritime relations?
China’s measures came on the heels of expanded rare earth export controls and Washington’s threat of intensive tariff increases. Additional Chinese actions could target American maritime supply chains, involving broader bans or higher fees.
Meanwhile, industry observers expect both sides to keep negotiating, maintaining channels for dialogue and emergency coordination even as the broader trade landscape remains volatile.
With these latest sanctions and operational fees, China signaled its willingness to escalate economic pressure within strategically vital industries.
The evolving dispute stands to shape shipping flows, trade balances, and investment strategies well beyond 2025, leaving companies and governments worldwide on alert for new developments and opportunities for adaptation.
Comments (0)
Please sign in to leave a comment