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President Lee Jae-myung applauds during the naming ceremony of the State of Maine at Hanwha Philly Shipyard in Philadelphia, U.S., on August 26. / Source: Yonhap News

The presidential office said Tuesday that the South Korean government has activated bilateral trade communication channels with China to minimize the fallout from Beijing’s sanctions on five U.S.-based subsidiaries of Hanwha Ocean.

“The government is in contact with China through established trade channels to reduce potential damage and coordinate an appropriate response,” the presidential office said in a statement on October 14.

It added that the potential impact on the MASGA project — the joint Korea-U.S. shipbuilding initiative — would be evaluated comprehensively. “Given that Hanwha Ocean has limited direct transactions with Chinese entities, the immediate effect appears to be contained,” it said, while noting that “future sanctions cannot be ruled out, and the government will closely monitor developments.”

China’s Commerce Ministry announced earlier in the day that it would impose countermeasures on five U.S.-linked subsidiaries of Hanwha Ocean: Hanwha Shipping LLC, Hanwha Philly Shipyard Inc. in Philadelphia, Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC, and HS USA Holdings LLC.

Beijing accused these firms of cooperating with U.S. sanctions targeting China’s maritime, logistics, and shipbuilding sectors, and prohibited Chinese organizations and individuals from engaging in any form of transaction or collaboration with them.

One of the entities, Hanwha Philly Shipyard, was visited by President Lee Jae-myung in August, where he reaffirmed Seoul and Washington’s commitment to the “Make American Shipbuilding Great Again” (MASGA) initiative — a key symbol of the Korea-U.S. industrial partnership.

In its announcement, the Chinese Commerce Ministry said the action was a response to Washington’s Section 301 investigation into China’s maritime and shipbuilding industries, calling the U.S. measures a “serious violation of international law and the basic norms of international relations.”

“The United States’ actions have gravely undermined the legitimate rights and interests of Chinese enterprises,” a ministry spokesperson said, adding that Hanwha Ocean’s subsidiaries “assisted and supported the U.S. government’s investigative activities, thereby harming China’s sovereignty, security, and developmental interests.”

Beijing urged the U.S. and related companies to “respect facts and multilateral trade rules, adhere to market economy principles and fair competition, and immediately correct their wrongful actions to stop undermining China’s interests.”