Tensions with Washington escalated after China sanctioned five U.S. companies of the South Korean shipbuilder Hanwha Ocean.
Chinese people and organizations will not be allowed to conduct business with the sanctioned enterprises as a result of the decision.
After the news, Seoul’s Hanwha Ocean stock fell more than 8%.
After China sanctioned five of its U.S. companies on Tuesday, intensifying tensions with Washington over their suspected participation in an investigation into the Chinese shipping sector, shares of South Korean shipbuilder Hanwha Ocean plummeted more than 8%.
In a statement, China’s Commerce Ministry named the sanctioned companies as Hanwha Shipping LLC, Hanwha Philly Shipyard Inc., Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC, and HS USA Holdings Corp.
The U.S. government’s investigations and actions against the Chinese shipbuilding, logistics, and marine industries have received help and cooperation from Hanwha’s U.S. businesses. A Mofcom official added in a separate statement, which CNBC translated, “China is very unhappy and firmly opposes it.”
In order to protect China’s security and sovereignty, the ministry said that the ban, which will take effect immediately, would prohibit Chinese persons and organizations from doing business with the sanctioned businesses.
When CNBC reached out to Hanwha Ocean for comment, she did not immediately reply.
Beijing said earlier Tuesday that it has started collecting the extra port fees on ships connected to the United States, but it made it clear that Chinese-built ships would not be subject to the taxes.
The action came after the United States decided to start charging high fees to Chinese ships that arrive at American ports on Tuesday at 12:01 a.m. EDT. Beginning that same day, China responded by charging American warships 400 yuan ($56) each net ton. The capacity of container ships may vary from 50,000 to 220,000 tons.
Beijing has also increased the number of American firms on its blacklist and announced a new framework for limiting the export of rare earths. Beijing defended its rare earths limitations as a “legitimate” move after U.S. President Donald Trump threatened to levy 100% higher tariffs on Chinese imports.
China’s Ministry of Transport said in a separate statement that it had begun looking into how the Section 301 inquiry in Washington affected the country’s shipbuilding and shipping sectors.
The investigation will also determine if businesses, groups, or people assisted the United States in “undertaking discriminatory restrictive behaviors” against China’s shipping supply chain, according to the ministry.