China has decided to temporarily lift sanctions for one year on five U.S. subsidiaries of Hanwha Ocean, following an agreement with the United States to avoid further escalation in their trade conflict.

China’s Ministry of Commerce announced Monday that restrictions on Hanwha Shipping, Hanwha Philly Shipyard, Hanwha Ocean USA International, Hanwha Shipping Holdings and HS USA Holdings would be suspended for the next 12 months.

The move follows the U.S. decision to pause its Section 301 investigation into China’s maritime, logistics and shipbuilding industries for one year.

The suspension of the earlier sanctions, imposed on Oct. 14, took effect immediately.

In response, Hanwha Ocean issued a statement welcoming the Chinese authority’s decision.

“We hope to further develop our relationship with Chinese business partners following the latest suspension of the sanctions,” Hanwha Ocean said in a statement.

Last month, China placed the five Hanwha U.S. subsidiaries on a sanctions list prohibiting Chinese entities from engaging in transactions with them.

The move was in retaliation for Hanwha’s cooperation with the U.S. government’s Section 301 probe into Chinese shipping and shipbuilding companies, which included investigations into port fees on Chinese vessels. Hanwha Philly Shipyard — a key site symbolizing Korea-U.S. shipbuilding cooperation — had publicly supported the U.S. investigation, drawing Beijing’s ire.

The suspension aligns with a broader trade detente reached during the U.S.-China leaders’ meeting in Busan on Oct. 30. According to a fact sheet released by the White House, China committed to rolling back measures targeting its shipping, logistics and shipbuilding sectors, and to lifting restrictions previously imposed on foreign firms, including Hanwha’s subsidiaries.

The five U.S. affiliates of Hanwha Ocean had become collateral damage in the latest round of the Washington-Beijing trade dispute, which has expanded beyond conventional trade items to include the shipping industry.

At the time, U.S. Trade Representative Jamieson Greer criticized Beijing’s regulatory actions, describing them as “economic coercion and retaliation” against companies seeking shipbuilding investments in the U.S.

When announcing the sanctions last month, Chinese authorities condemned Hanwha Ocean for “cooperating with the U.S. government’s Section 301 probe into China and seriously harming Beijing’s national interests and security.”

Amid growing risks for Korean firms caught in the escalating U.S.-China trade conflict, Korean President Lee Jae Myung raised the issue during his Nov. 1 summit with Chinese President Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, North Gyeongsang Province.
Source: The Korea Times