BEIJING – China has virtually lifted sanctions on five US subsidiaries of South Korean shipbuilder Hanwha Ocean Co., in a conciliatory step following last month’s agreement between Chinese President Xi Jinping US President Donald Trump to halt the escalating US-China trade conflict.
In a statement posted Monday on its website, China’s Ministry of Commerce said it would suspend countermeasures against the Hanwha Ocean units for one year, citing Washington’s decision to defer new tariffs and investigations under Section 301 of the US Trade Act targeting China’s shipping, logistics and shipbuilding sectors.
The ministry said, “Given the US government’s postponement of planned Section 301 actions against China’s maritime, logistics and shipbuilding industries, we have decided to suspend for one year the measures applied to five US subsidiaries of Hanwha Ocean.”
Beijing imposed the sanctions in mid-October, prohibiting Chinese firms from doing business with Hanwha Ocean’s US affiliates, accusing them of cooperating with the US Trade Representative’s Section 301 investigation.
The five firms are Hanwha Shipping LLC, Hanwha Philly Shipyard Inc., Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC and HS USA Holdings Corp.
The sanctions marked the first time Beijing has directly targeted a Korean company under the current China-US trade dispute.
INDIRECT RESPONSE TO MASGA PROJECT
The punitive measures have been viewed in Seoul and Washington as an indirect response to the MASGA, or Make American Shipbuilding Great Again, project – a Korea-proposed initiative to revive the US shipbuilding industry with minimal labor input through automation and AI.
Hanwha Ocean, formerly Daewoo Shipbuilding & Marine Engineering, has been leading the MASGA project in the US.
The Chinese sanctions sent ripples through Korea’s shipbuilding sector, long seen as a pillar of high-value manufacturing and a key partner for both US naval programs and global trade.
Executives at HD Hyundai Heavy Industries Co., another key player in the MASGA project, have also closely monitored developments.
HANWHA WELCOMES CHINA’S MOVES
The suspension follows the Trump–Xi summit in Busan on Oct. 30, during which the two leaders agreed to pause the trade war and reopen dialogue on industrial and maritime cooperation.
Following the APEC agreement, the US announced a one-year deferral of sanctions against China related to the Section 301 probe.
In a statement, Hanwha Ocean welcomed Beijing’s move, saying, “We appreciate the Chinese government’s decision and hope this measure will pave the way for further development of our partnerships with Chinese business counterparts.”
The easing of restrictions removes an immediate source of friction between Seoul, Washington and Beijing, though analysts caution that it remains a temporary truce, with both sides retaining the option to reimpose measures should Washington-Beijing tensions rise again.
Late last month, the US Department of the Treasury criticized China’s sanctions against Hanwha, calling the move an irresponsible attempt to undermine US-Korea cooperation in the maritime and manufacturing sectors.
