The Donald Trump administration in the United States announced on the 16th (local time) that China’s recent sanctions on five subsidiaries of Hanwha Ocean are an attempt to weaken South Korea-U.S. shipbuilding cooperation and stated that “the United States will firmly stand with South Korea.”
The U.S. State Department, when asked by domestic media about China’s decision to sanction Hanwha Ocean, responded by calling it an “irresponsible attempt to interfere with private business operations and weaken Korea-U.S. cooperation for the revival of the American shipbuilding and manufacturing industry.”
Furthermore, the State Department added that “China’s actions only reaffirm the importance of strengthening economic cooperation with U.S. allies and partners in the Indo-Pacific region” and described it as “a recent example of China’s long-standing pattern of coercing South Korea.”
Last year, Hanwha Group invested $100 million to acquire Philadelphia Shipyard in the U.S. Hanwha Ocean is a leading company in the ‘MASGA (Make American Shipbuilding Great Again)’ project, signifying Korea-U.S. shipbuilding cooperation. President Jae-myung Lee visited Hanwha’s Philly Shipyard during his visit to the U.S. in August.
On October 14th, the Chinese Ministry of Commerce announced sanctions, claiming that Hanwha Ocean’s relevant subsidiaries in the U.S. were involved in activities supporting U.S. government investigations harming China’s sovereignty, security, and development interests. The sanctions include Hanwha Philly Shipyard, Hanwha Shipping, Hanwha Ocean USA International, Hanwha Shipping Holdings, and HS USA Holdings, and they are prohibited from trading with all organizations and individuals in China.
On the same day that the U.S. government issued an official critical stance on China’s sanctions against Hanwha Ocean, the U.S. and South Korea discussed ways to materialize shipbuilding cooperation at the White House.
For follow-up discussions on trade negotiations, Kim Yong-bum, the presidential secretary for policy, and Kim Jung-gwan, the Minister of Trade, Industry, and Energy, visited the White House and the Office of Management and Budget (OMB). At the Eisenhower Executive Office Building, a part of the White House, they met with OMB Director Russel Vought for over 50 minutes. Kim stated, “We are having various constructive discussions regarding MASGA.”
Kim clarified that discussions with OMB did not specifically touch on China’s sanctions against Hanwha Ocean’s subsidiaries but focused on specific projects related to MASGA. Yong-han Koo, the head of the trade negotiation division, also accompanied them during the meeting.
When asked if they expected tangible outcomes from the OMB visit during the ongoing final trade negotiations between South Korea and the U.S., Kim replied, “The OMB is not directly involved in negotiations.” He added, “We are here to hear their (the U.S.’s) stance on one of the important projects between Korea and the U.S.”
Following the OMB meeting, Minister Kim continued negotiations with U.S. Secretary of Commerce Howard Ruddnick to finalize a trade agreement between the two countries. Although a broad agreement was reached on July 30, negotiations had stalled over the composition of a $350 billion investment package from Korea to the U.S. However, talks are showing progress ahead of the upcoming APEC in Gyeongju later this month.