China’s Sanctions Against US-Linked Hanwha Units Seen as Warning Gesture, Analysts Say
Reuters October 14, 2025

SEOUL, Oct 15 (Reuters) – China’s sanctions against five U.S.-linked affiliates of South Korean shipbuilder Hanwha Ocean 042660.KS are seen as a warning gesture without immediate impact, and Beijing is unlikely to gain much by expanding them, analysts said on Wednesday.

The move, announced on Tuesday when the U.S. and China began charging additional port fees targeting each other’s vessels, comes ahead of an expected meeting between U.S. President Donald Trump and Chinese leader Xi Jinping in late October to resolve the protracted trade war between the world’s two largest economies.

China’s commerce ministry banned transactions and cooperation with Hanwha Ocean’s U.S.-linked affiliates, citing security risks stemming from their involvement in the U.S. government’s “relevant investigative activities.” It did not elaborate on the suspected activities.

Hanwha, one of the world’s largest shipbuilders, owns Philly Shipyard in the U.S. and has won contracts to repair and overhaul U.S. Navy ships. Its entities also will build a U.S.-flagged LNG carrier.

The sanctions do not have any direct impact as the Hanwha affiliates Beijing sanctioned have no business connection with China, said Korea Investment & Securities analyst Kang Kyung-tae.

“Stock prices had fallen due to various concerns that the sanctions will spread to … Korean parent companies and the entire Korean shipbuilding industry, but this is only a possibility,” Kang said.

Shares of Hanwha Ocean rebounded 1.8% on Wednesday, while peer HD Hyundai Heavy 329180.KS shares rose 2.2%, recouping some of Tuesday’s losses.