Hong Kong. China has imposed sanctions on five U.S. subsidiaries of South Korean shipbuilder Hanwha Ocean. China’s commerce ministry said on Tuesday that the move was in response to US President Donald Trump’s strategic initiative to rebuild industrial production in the US.

According to the ministry, Chinese companies will no longer be able to do any kind of transaction with these five units. The ban comes as Washington launches an official investigation into China’s growing dominance in the global shipbuilding industry.

According to China’s Ministry of Commerce, the US investigation has endangered China’s national security and its shipbuilding industry. The US side cited Hanhua Ocean’s involvement in its investigation and portrayed China’s industrial policy as “unfair competition”.

The U.S. Trade Representative’s Office launched a Section 301 trade investigation in April 2024. The research concluded that China’s growing industrial influence is unfavorable for US businesses.

The international shipping and shipbuilding industry is at the centre of new trade tensions between Washington and Beijing. The two countries imposed a new port tax on each other’s ships from Tuesday.

The banned companies include Hanwha Shipping LLC, Hanwha Philly Shipyard Inc., Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC and HS USA Holdings Corp.

At the end of 2024, Hanwha Ocean bought Philly Shipyard in Pennsylvania for $100 million. Then, in August, the company announced that it would build a new Docks & Quays (ship parking facilities) in a five-billion dollar investment to support a U.S. initiative to restore globally competitive shipbuilding capabilities.

China has clarified that its new port tariffs will apply to US companies and ships owned or operated by these entities. This includes ships that are 25 percent or more U.S.-owned, U.S.-flagged or built in the United States.