Chinese sanctions on Hanwha’s US shipbuilding units aim to ‘coerce’ South Korea, State Dept says

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SEOUL (Reuters) -Chinese sanctions imposed this week on U.S. affiliates of shipbuilder Hanwha Ocean aim to undermine South Korea-U.S. cooperation and “to coerce” Washington’s Asian ally, a U.S. State Department spokesperson said on Friday.   

China announced the sanctions on Tuesday as the U.S. and China began charging additional port fees on each other’s vessels in the latest exchange in a protracted trade war ahead of a planned meeting of the two countries’ leaders.

China’s Commerce Ministry banned transactions and cooperation with Hanwha Ocean’s U.S.-linked affiliates, citing security risks stemming from what it said was their involvement in the U.S. government’s “relevant investigative activities.”

“China’s targeting of Hanwha is an irresponsible attempt to interfere with a private company’s operations and undermine U.S.-ROK (Republic of Korea) cooperation on revitalizing American shipbuilding and manufacturing,” a State Department spokesperson said.

“China’s actions … are the latest example in a long pattern of China’s attempts to coerce (South) Korea,” the spokesperson said in a statement relayed to Reuters.

The five companies under new Chinese sanctions include Philly Shipyard in the U.S., owned by Hanwha, which is one of the world’s largest shipbuilders and has won contracts to repair and overhaul U.S. Navy ships.

Its entities will also build a U.S.-flagged LNG carrier.

South Korea has pledged to inject as much as $150 billion to help the U.S. revive its troubled shipbuilding industry as part of its trade negotiations with Washington aimed at lowering U.S. import duties against South Korean goods.

(Reporting by Jack Kim, David Brunnstrom; Editing by Chris Reese, Ed Davies)