China agrees to remove maritime, shipbuilding sanctions

The White House said China will lift its retaliatory measures against the United States in the maritime, logistics, and shipbuilding sectors following the U.S.-China summit in Busan on Oct. 30 during the APEC summit in Gyeongju. Attention is now turning to whether Hanwha Ocean, a shipbuilder recently blacklisted by Beijing as a restricted entity in U.S. investments and partnerships, will also be exempt from the sanctions.

The White House released a Nov. 1 fact sheet outlining details of the trade agreement reached at the summit. According to the document, China agreed to lift measures it had imposed in retaliation for Washington’s investigation of China’s maritime, logistics, and shipbuilding industries under Section 301 of the Trade Act. Beijing also will remove sanctions placed on several shipping companies.

On Oct. 14, China designated five U.S. subsidiaries of Hanwha Ocean (Hanwha Philly Shipyard, Hanwha Shipping, Hanwha Ocean USA International, Hanwha Shipping Holdings, and HS USA Holdings) as restricted entities barred from trade with Chinese firms. Beijing said the decision was made because those companies had cooperated with the Office of the U.S. Trade Representative during its Section 301 investigation.

With the two countries reaching a trade agreement at the summit, sanctions on China’s maritime, logistics, and shipbuilding sectors are expected to be lifted. Hanwha Ocean could also have its penalties removed. However, the company said, “Nothing has been confirmed or officially communicated yet.”

The White House fact sheet also said China pledged to remove export controls on rare earth elements and critical minerals, end retaliatory actions against U.S. semiconductor and major companies, resume imports of U.S. soybeans and other agricultural products, and stop the flow of fentanyl precursor chemicals into the United States.

In response, the United States plans to reduce tariffs on Chinese fentanyl products by 10 percentage points and grant a one-year suspension of sanctions in the maritime, logistics, and shipbuilding sectors. “The United States will continue negotiations with China under Section 301 while maintaining historic cooperation with South Korea and Japan to revitalize the U.S. shipbuilding industry,” the White House said. The statement also emphasized the importance of the MASGA (Make American Shipbuilding Great Again) project, a key initiative representing Korea-U.S. collaboration in shipbuilding.


Woo-Sun Lim imsun@donga.com