China Lifts Sanctions on Hanwha Ocean for One Year.
Hanwha Ocean, which was caught in the crossfire during the U.S.-China trade conflict, has gained temporary breathing room. As China reached partial agreements with the United States in economic and trade negotiations, it decided to suspend sanctions imposed on Hanwha Ocean’s U.S. subsidiaries for one year. Accordingly, Hanwha Ocean will minimize repercussions in raw materials and component supplies. However, since this suspension is not permanent but has a one-year timeframe, uncertainties are expected to continue.
China’s Ministry of Commerce announced on Nov. 10, “As the United States suspends Section 301 investigation measures against China’s shipping, logistics, and shipbuilding industries for one year starting Nov. 10, we decide to suspend corresponding measures against Hanwha Ocean’s 5 related U.S. subsidiaries for one year starting Nov. 10.”
Section 301 of U.S. trade law is legislation related to unfair trade practices. Previously, the U.S. Trade Representative (USTR) launched a Section 301 investigation into China’s shipping, logistics, and shipbuilding industries last June.
This was based on allegations that the Chinese government provided large-scale subsidies to related industries, leading to global market oversupply and price declines. When the United States initiates Section 301-related investigations, it can implement measures such as additional tariffs.
Additionally, the U.S. side imposed further measures by announcing it would impose port fees on Chinese vessels. This meant imposing additional fees when vessels manufactured in China or operated by Chinese entities enter U.S. ports, which was interpreted as part of efforts to check China’s shipbuilding industry.
In response, China also announced it would impose special port fees on U.S. vessels, escalating conflicts in the shipping sector.
Hanwha Ocean was affected during this process. China’s Ministry of Commerce imposed sanctions including export controls on Oct. 14, targeting Hanwha Ocean’s five U.S. subsidiaries, claiming they cooperated with the U.S. Section 301 investigation.
The sanctioned entities at that time included five locations, including Hanwha Philly Shipyard in Philadelphia, Pennsylvania. Philly Shipyard was called a symbol of Korea-U.S. cooperation for “MASGA (Make American Shipbuilding Great Again).”
The situation changed following the U.S.-China summit held in Korea on Oct. 30, while U.S.-China economic and trade negotiations continued.
Through the summit that day and previous economic and trade negotiations held in Malaysia, the U.S. and China agreed to suspend tariff impositions on both sides, reduce fentanyl-related tariffs by 10 percentage points, and resume China’s imports of U.S. agricultural products including soybeans.
Source: Businesskorea