China has imposed sanctions on five U.S.-linked subsidiaries of South Korea’s Hanwha Ocean, accusing them of assisting Washington’s trade investigations into Chinese maritime and logistics sectors.

The decision, announced by the Chinese Ministry of Commerce, bans Chinese companies and individuals from doing business with the sanctioned entities, citing threats to China’s national sovereignty and security.

Beijing said the Hanwha units supported U.S. efforts to restrict China’s shipbuilding and port logistics industries, part of an escalating standoff between the world’s two largest economies.

The sanctions come shortly after Washington introduced new port fees and restrictions on Chinese vessels to promote domestic shipbuilding, prompting a series of retaliatory measures from Beijing.

The move marks a rare extension of China’s economic retaliation to companies from allied nations, signaling a readiness to punish third-country firms that align with U.S. strategic policies.

Analysts described it as an effort to deter foreign corporations from cooperating with American trade enforcement against Chinese entities.

Following the announcement, shares of Hanwha Ocean fell sharply in Seoul trading, while other shipbuilders such as HD Hyundai Heavy Industries also saw declines.

South Korea’s presidential office confirmed it is in diplomatic contact with Chinese authorities to assess and mitigate the impact of the sanctions.

Hanwha, which has expanded operations in the United States through its 2024 acquisition of the Philly Shipyard and ongoing contracts for U.S. naval projects, has not issued a detailed statement on the penalties.

The episode underscores the widening reach of U.S.–China economic rivalry, now spilling into strategic sectors of allied economies, with potential implications for global shipbuilding and defense supply chains.