China has responded sharply to newly imposed U.S. shipping restrictions by targeting the American arms of South Korea’s Hanwha Ocean and launching its own investigation into Washington’s maritime moves. What’s unfolding is more than tit-for-tat; it’s a strategic push by Beijing to assert strength in the global port and shipbuilding domain.
Beijing’s Answer: Hanwha Curbs
On October 14, China’s Ministry of Commerce levied sanctions on five U.S.-linked subsidiaries of Hanwha Ocean, citing their support of U.S. investigative efforts that, Beijing claims, threaten China’s sovereignty. Under the new rules, no Chinese person or organization may do business with those five units.
The affected subsidiaries include:
- Hanwha Shipping LLC
- Hanwha Philly Shipyard Inc.
- Hanwha Ocean USA International LLC
- Hanwha Shipping Holdings LLC
- HS USA Holdings Corp
The move jolted markets: Hanwha’s shares plunged by as much as 8% during intra-day trading in Seoul. China framed this as a proportional response to U.S. “discriminatory” maritime measures.
The U.S. Trigger: Port Fees and Probes
Washington’s entry point into this conflict was an aggressive push to impose port fees on Chinese vessels, believing that China’s dominance in shipbuilding unfairly undercuts U.S. industry. China responded in kind: starting October 14, U.S.-owned or -flagged ships docking in China will face charges at a rate of RMB 400 per net ton per voyage — escalating over time until 2028.
In parallel, Beijing kicked off a probe into how the U.S. Section 301 investigation affects Chinese shipping and supply chains. That probe will look into whether Chinese entities supported U.S. measures deemed discriminatory.
Strategic Calculus: What China Gains (and Risks)
Gains:
- Leverage: By targeting Hanwha’s U.S. units, China signals it can retaliate beyond abstract tariffs.
- Deterrence: Other firms may think twice before aligning with U.S. maritime probes.
- Diplomatic pressure: The move raises the stakes ahead of renewed trade talks.
Risks:
- Escalation: Washington could counter with harsher measures or sanctions.
- Collateral damage: Global shipping firms might reroute or reduce exposure to China, affecting trade flows.
- Reputation costs: Foreign investors may see this as another sign of China using economic statecraft.
The Global Shipping Angle
Remember: 80% of global trade moves by sea. Port fees, shipping delays, or access barriers can ripple across supply chains. Companies relying on Chinese ports or U.S. flag vessels must now watch costs more closely.
Chinese shipping companies are already bracing for impact. The U.S. port fees (which take effect simultaneously) will hit Chinese carriers like Cosco and OOCL hard.
What Comes Next
- U.S. reaction — Expect counters: more tariffs, sanctions, or increased scrutiny of Chinese shipping firms.
- Diplomacy — Trade negotiators might try to paper over this mess during upcoming talks (e.g., APEC).
- Ripple effects — Other nations may get pulled in, choosing sides or facing pressure to decouple.
- Judicial maneuvering — Legal challenges may emerge in international tribunals over port fee legality.
Bottom Line
China’s counter on shipping is an escalated move — not just retaliation but assertion. It uses Hanwha curbs and a probe to show it won’t stand idle while the U.S. reshapes maritime norms. The risk: a spiral where global shipping becomes another front in the U.S.–China standoff.
