US-China maritime deal likely to lift sanctions on Hanwha Ocean

President Lee Jae Myung speaks during the naming ceremony of the State of Maine vessel at Hanwha Philly Shipyard in Philadelphia, Pa., Aug. 27. Yonhap

Hanwha Ocean is expected to benefit from the trade deal struck between United States President Donald Trump and Chinese President Xi Jinping, as Beijing will presumably lift sanctions on Hanwha Ocean’s U.S. subsidiaries as a result of the agreement.

According to a fact sheet released by the White House on Sunday, “China will remove measures it took in retaliation for the U.S.’s announcement of a Section 301 investigation on China’s Targeting the Maritime, Logistics and Shipbuilding Sectors for Dominance, and remove sanctions imposed on various shipping entities.”

Washington also noted that it will suspend implementation of the responsive actions taken as part of the Section 301 investigation on China for one year, starting Nov. 10, and negotiate with China while “continuing its historic cooperation with the Republic of Korea and Japan on revitalizing American shipbuilding.”

The fact sheet is an outcome of the Trump-Xi summit in Busan on Thursday, on the sidelines of the Asia-Pacific Economic Cooperation summit in Gyeongju, North Gyeongsang Province.

The Section 301 investigation allows Washington to take retaliatory trade measures against a trading partner that engages in unfair trade practices that restrict U.S. commerce.

In response, Beijing barred Chinese businesses from engaging in dealings with U.S.-affiliated companies, including Hanwha Ocean’s five U.S. subsidiaries — Hanwha Shipping, Hanwha Philly Shipyard, Hanwha Ocean USA International, Hanwha Shipping Holdings and HS USA Holdings.

U.S. President Donald Trump and Chinese President Xi Jinping talk as they leave after a bilateral meeting at Gimhae International Airport in Busan, Oct. 30. Reuters-Yonhap

The subsidiaries were expected to play pivotal roles in the $150 billion shipbuilding partnership between Korea and the U.S., which was proposed as part of Korea’s bargaining chip to lower the Trump administration’s blanket tariffs.

Among them, Hanwha Philly Shipyard plays a symbolic role in Korea-U.S. shipbuilding cooperation. During its earnings call on Oct. 27, Hanwha Ocean said the shipyard holds an order backlog worth $3 billion and aims to achieve a turnaround by 2026.

The issue was discussed during a summit between President Lee Jae Myung and President Xi on Saturday. Korea’s National Security Adviser Wi Sung-lac said, “Lee and Xi had productive discussions on Hanwha Ocean subsidiaries,” adding, “If tensions between the two ease, there could be productive progress on the Hanwha Ocean issue as well.”