• China has imposed sanctions on five US subsidiaries of Hanwha Ocean amid trade tensions.
• The sanctions follow the implementation of additional port fees by both countries.
• Hanwha's shares dropped significantly in response to the announcement.
• China accused the subsidiaries of undermining its sovereignty through cooperation with the US.
• Both countries have initiated investigations into each other's maritime policies.

China announced sanctions on five US-based subsidiaries of the South Korean shipping giant Hanwha Ocean, accusing them of cooperating with the US government, which it claims jeopardizes China's sovereignty and development interests. The Ministry of Commerce stated, "Hanwha Ocean's US-related subsidiaries have assisted and supported the US government's relevant investigative activities," leading to a prohibition on transactions with these entities by Chinese organizations and individuals, according to SCMP and Channel News Asia.

The sanctioned subsidiaries include Hanwha Shipping LLC and Hanwha Philly Shipyard Inc. This response is part of ongoing trade friction between the US and China, which has intensified with the implementation of additional port fees targeting vessels from both nations. Analysts have noted that these fees could disrupt global shipping and significantly impact companies involved, including Hanwha, which is investing $5 billion to strengthen its US shipyard operations, as reported by Anadolu Agency and TRT Global.

Hanwha Ocean’s stock fell 5.3% on the news, signaling the market's response to potential operational impacts due to sanctions. The sanctions coincide with the US Trade Representative’s Section 301 investigation aimed at addressing the challenges posed by China's rising shipbuilding dominance. This investigation was launched in April 2024 as part of a broader strategy to revitalize the US shipbuilding sector, which has faced significant competition from China, according to Channel News Asia and TRT Global.

The reciprocal nature of these sanctions and port fees suggests a deepening economic conflict, with both nations accusing each other of violating international norms. China's Ministry of Commerce stated that the US's actions "seriously violate international law and basic norms governing international relations," underscoring the high stakes in this ongoing trade dispute that directly affects global shipping operations, as highlighted by Anadolu Agency and SCMP.