MASGA adrift in US-China crossfire, Hanwha left to wait out the storm

China's Ministry of Commerce on Tuesday invoked its anti-foreign sanctions law to blacklist several U.S. units of Korean shipbuilder Hanwha Ocean, barring them from business with Chinese entities and individuals.

The sanctions target Hanwha Shipping LLC, Hanwha Philly Shipyard Inc., Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC, and HS USA Holdings.
 

Beijing said the move was a punitive response to the companies' alleged support for Washington's Section 301 investigation into China's maritime, logistics, and shipbuilding sectors.

"China expresses strong dissatisfaction and resolute opposition," the ministry said in a statement, accusing Hanwha's units of cooperating with U.S. efforts to suppress Chinese industry.
 

Korean companies have often been subject to Beijing's retaliatory measures when geopolitical tensions rise. China banned group tours to South Korea and effectively forced Lotte Group out of the country in 2017 after it provided land for a U.S. missile defense system that China claimed threatened its national security.
 

The unusual singling out of Hanwha Ocean subsidiaries, analysts say, reflects Beijing's attempt to undercut MASGA—Washington's campaign to rebuild U.S. shipbuilding capacity with help from Korean capital and expertise.
 

"We believe the announcement was made to pressure South Korea to side with China rather than the U.S. The countermeasures seem calibrated to avoid severe economic fallout while sending a political message," said Choi Young-myung, professor of naval architecture and ocean engineering at Pusan National University.
 

China dominates the global shipbuilding industry, commanding 36 percent of the world's orderbook and securing about 66 percent of new orders at domestic yards. Hanwha Ocean's exposure in China is limited and the company reportedly dissolved its joint venture with China's CMHI earlier this year.
 

Hanwha's newly acquired Philly Shipyard in the United States—purchased for $100 million last year—has become the symbolic flagship of MASGA. The Korean conglomerate last August pledged $5 billion to revive America's shipbuilding industry from the facility, which has been dormant for years.
 

For that, Hanwha has become collateral damage in the latest maritime clash between Washington and Beijing. The U.S. Trade Representative's new docking fees on Chinese-owned and operated vessels took effect this week, following an April Section 301 probe aimed at curbing China's dominance in global shipbuilding and boosting domestic production.

The move has reignited a fresh cycle of retaliations, with Beijing tightening exports of rare-earth minerals and Washington threatening 100-percent tariffs on Chinese goods.
 

Hanwha Ocean said it is "closely reviewing potential business impact," while the Korea Marine Equipment Research Institute noted it is too early to assess the fallout, as Hanwha's ramp-up of U.S. operations is in fledgling stage.