China has imposed sanctions on several U.S.-linked affiliates of South Korea’s Hanwha Ocean, including the historic Philly Shipyard, in what U.S. officials are calling a blatant attempt to disrupt American-South Korean cooperation in shipbuilding and defense manufacturing.
The move, announced this week by China’s Commerce Ministry, bans transactions with Hanwha’s U.S. affiliates, citing so-called “security risks” tied to the companies’ involvement in U.S. government investigations. But observers see the sanctions as part of a broader strategy—a pressure campaign aimed not just at Hanwha, but at South Korea’s growing role in helping Washington rebuild its industrial base.
“This is an irresponsible attempt to interfere with a private company’s operations and undermine U.S.-ROK cooperation,” a U.S. State Department spokesperson said Friday. The spokesperson also called it “just the latest example” of China’s efforts to coerce South Korea.
At stake is more than business. Hanwha Ocean is a major global shipbuilder with deepening ties to the U.S. defense sector. Its work includes contracts to repair and overhaul U.S. Navy vessels, and plans to construct a U.S.-flagged liquefied natural gas (LNG) carrier—part of Washington’s efforts to ensure energy security with American-built ships.
South Korea, for its part, has pledged up to $150 billion to help revive U.S. shipbuilding, a commitment that’s become a key pillar in recent trade negotiations aimed at lowering tariffs on Korean goods. That level of support has raised eyebrows in Beijing, where officials are wary of a more united industrial front between two of their largest competitors.
This week’s sanctions come as Washington and Beijing escalate their trade standoff, with each side imposing new port fees on incoming vessels. But targeting Hanwha is a calculated strike—part economic leverage, part geopolitical message.
Beijing’s goal is simple: pressure South Korea to rethink its alignment with the United States. And by striking at the maritime sector, China is signaling that it sees shipbuilding not just as an industry, but as a strategic battleground.
For the U.S., the lesson is equally clear. Rebuilding domestic capabilities—from shipyards to semiconductor fabs—is no longer just an economic imperative. It’s now squarely in the realm of national security.