China Hits Back at US on Shipping With Hanwha Curbs, Probe
(Bloomberg) -- China has threatened further retaliatory measures against US curbs on its shipping sector, after sanctioning American entities of a South Korean shipping giant.
The Ministry of Commerce said Tuesday it was placing limits on five US entities of Hanwha Ocean Co., one of South Korea’s biggest shipbuilders. The company’s shares dipped as much as 8% in Seoul, their biggest decline in about two months.
The moves are a marked escalation in a long-standing dispute between the world’s two largest economies over maritime dominance. It comes after tensions between the US and China escalated in recent weeks as President Donald Trump threatened additional 100% tariffs on imports from the Asian nation in response to new Chinese export controls.
This week, retaliatory levies on American-owned ships arriving in China came into effect as a tit-for-tat move by the Xi administration, causing concern across the global maritime sector. Beijing’s new curbs forbids any individual and entity from doing business with the five companies.
Meanwhile, the Ministry of Transport said that it was conducting a probe into the impacts from the US Trade Representative’s Section 301 investigation into China’s maritime sector, and may implement retaliatory measures in due time.
That dispute has consequences for global economy, as vessels are involved in 80% of worldwide trade. Washington announced in April plans to curb China’s shipbuilding prowess even as it sought to build up American capabilities. That had forced Chinese yards to lose some market share, while Chinese shipping lines faced severe penalties for calling at US ports.
At the same time, South Korean shipbuilders have offered Washington sweeteners to help the US revive its shipbuilding sector. Hanwha Ocean was the first Korean yard to acquire an American one, and has been seeking to transfer some of that know-how to American shores.
The five firms curbed by China are Hanwha Shipping LLC, Hanwha Philly Shipyard Inc., Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC and HS USA Holdings Corp.
Spokespersons for Hanwha Ocean in Seoul and Hanwha USA didn’t immediately respond to requests for comment.
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