In a forceful escalation of maritime tensions, China, on October 14, 2025, enacted retaliatory port fees on U.S.-linked vessels and slapped sanctions on key shipping units, signaling a sharp turn in its economic confrontation with Washington. The twin moves — imposing docking levies on American-owned or flagged ships and prohibiting Chinese entities from dealing with certain subsidiaries of South Korea’s Hanwha Ocean — ratchet up pressure just as U.S. and Chinese leaders prepare for diplomacy later this month.
China’s Transport Ministry formally began collecting special port charges from vessels built, flagged, or operated by the U.S., pegged at 400 yuan per net ton for each voyage — a figure slated to increase over time until 2028. The fees will apply to the first five voyages per year by a vessel. However, Chinese-built ships, as well as vessels entering for repair or under certain exemptions, are spared.
Simultaneously, Beijing’s Commerce Ministry announced sanctions against five U.S.-related subsidiaries of the South Korean shipbuilder Hanwha Ocean, including its U.S. operations like Hanwha Philly Shipyard. The measure bans Chinese individuals and organizations from transacting with these entities. The ministry accused the units of collaborating with U.S. investigative activities that endanger China’s security and interests.
The synchronized timing is telling: both port fees and sanctions kick off concurrently with U.S. initiatives. Washington is rolling out its own port fees on Chinese vessels, aimed at undermining China’s stronghold in global shipping. China frames its response as defensive — a tit-for-tat measure to retaliate against what Beijing calls discriminatory practices. The Commerce Ministry also warned of further retaliatory measures should the U.S. continue to escalate.
Markets reacted quickly. Shares of Hanwha Ocean subsidiaries plunged following the announcements, while stocks of Chinese shipbuilders rebounded. Analysts interpreted the sanctions as a sharp escalation beyond tariff spats. Some observers cautioned that shipping disruptions and higher fees could ripple through global trade, increasing costs and complicating supply chains.
For Washington, the Chinese measures are unlikely to be viewed as mere symbolism. The United States has been seeking to rebuild its domestic shipbuilding capacity and to challenge China’s dominant logistics position. The port fees on Chinese vessels—starting on the same day—are part of that broader push.
In response to the escalating standoff, U.S. Treasury Secretary Scott Bessent has confirmed active negotiations with Beijing to de-escalate the crisis. While he reiterated support for President Trump’s proposal to impose 100% tariffs on Chinese goods beginning November 1, Bessent emphasized that diplomatic engagement remains ongoing and that lower-level Chinese officials may have initiated countermeasures independently. He also cautioned China that several levers are still in the U.S.’s hands — such as controls on technology, minerals, and finance flows. Port charges are not inexpensive in terms of magnitude. Non-payment might stall a ship’s import/export processing, literally grounding operations within China. The billing process commences on April 17 every year, and the initial port of entry on every trip sets off the charge. For certain ships, five compensated voyages a year could quickly add up to a hefty financial expenditure.
The Hanwha sanctions add to the pressure in another direction, cutting cooperation ties. Targeting U.S.-tied shipping companies, China sends a message not only to Washington but also to third-party players engaged in seaborne logistics. The Commerce Ministry’s words position the move as one of defense: “China will resolutely respond to unjustified blockade and coercion,” it said in a statement.
In authorizing itself to punish entities outside Chinese territorial limits, Beijing expands its counter-attack arsenal. Hanwha units, even though managed by a South Korean parent, are charged with helping the U.S. government carry out investigations — something Hanwha has denied. For central global shipping companies, the Chinese action poses a strategic question: will exposure to U.S. incentives trigger secondary repercussions from China?
This encounter highlights the way in which maritime dominance is becoming a new battleground of the U.S.–China trade war. China has perfected supremacy in shipbuilding, supply chains, and port networks over decades — a structural supremacy in global trade. The U.S., by probing that supremacy, is not only attacking goods but the underlying infrastructure of trade.
The actions can also impact the impending summit between President Xi Jinping and President Trump, which is anticipated during APEC later this month. The two are said to be setting up negotiating bargaining chips, and China’s port charges and sanctions could be used as a bargaining chip. Some fear that such actions will undermine faith before the meeting.
For international trade, the breaking point could soon come. Shipping companies plying the U.S.-China route have to now navigate a messy matrix of fees, sanctions, and jurisdictions. The smaller ones could get squeezed. The bigger players could reflag or divert ships to avoid fees. Already, some companies are examining supply chains to limit exposure to Chinese ports.
Several risk avenues are opened: longer shipping periods, more expensive freight, renegotiation of contracts, insurance issues, and rerouting of commodities flows. Markets are already jittery. Analysts cautioned that the increasing maritime taxation has the potential to distort global freight flows wildly.
Diplomats too, will rush into action. The foreign ministry of South Korea, in fact, is considering the potential effects of the Hanwha sanctions on Korean companies and its relations with Washington and Beijing. Hanwha has so far refused to comment at the moment, although its share movement is a reflection of investor anxiety.
In the wider context, the episode reveals how trade, security and maritime policy are increasingly becoming intertwined. China’s export restrictions on rare earths, its licensing regime, semiconductor investigations, and shipping restrictions now constitute a multi-fronted strategy.
For Washington, the math is precarious. While the port charges and sanctions tests get resolved, overextension can galvanize international pushback or destabilize supply chains. Bessent’s overtures indicate wanting to find equilibrium between pressure and diplomacy. Trump’s impending tariff increase to 100% on Chinese products increases the stakes even more if Beijing perceives it as a provocation.
Nevertheless, most analysts recognize a potential for de-escalation. Rapprochement at the staff level is possible through talks at the IMF/World Bank meetings. If the U.S. and China can freeze new moves, it can buy time before the bilateral summit. Yet for now, China has opened up a fresh trade battlefront: the docks and the carriers.
China sees Beijing’s control over ports and shipping as threatened; it stands ready to weaponize maritime policy. Whether this cornered escalation produces deterrence or disruption may well set the stage for the next chapter of U.S.–China economic relations.ize maritime policy. Whether this cornered escalation leads to deterrence or disruption may well define the next phase of U.S.–China economic relations.
