China announced sanctions on Tuesday against five US-linked subsidiaries of South Korean shipbuilder Hanwha Ocean amid trade tensions between the world's two largest economies, sending the company's shares sharply lower.

The move, announced by the Commerce Ministry, comes on the day that Beijing and Washington implement additional port fees targeting each others' vessels, although China has exempted ships it built.

The five US-linked subsidiaries are Hanwha Shipping, Hanwha Philly Shipyard, Hanwha Ocean USA International, Hanwha Shipping Holdings and HS USA Holdings.

Organisations and individuals within China are prohibited from engaging in any transactions, cooperation or related activities with these Hanwha entities, the ministry said in a statement.

"Hanwha Ocean's US-related subsidiaries have assisted and supported the US government's relevant investigative activities, thereby jeopardising China's sovereignty, security, and developmental interests," the statement said, without elaborating.

In August, Hanwha announced a US$5 billion additional investment in the Philly Shipyard, which it acquired in 2024 for US$100 million, after South Korea pledged to inject as much as US$150 billion to help the United States revive its domestic industry.

President Donald Trump's administration has said the United States needs help from allies Japan and South Korea to revitalise the troubled shipbuilding sector, which is lagging behind China, especially for manufacturing warships.

Hanwha's domestic rival HD Hyundai Heavy Industries, the world's largest shipbuilder, is also in talks with multiple companies to acquire US shipyards.

Hanwha runs a shipyard in Shandong that builds modules of ship components, according to a company filing. Hanwha supplies the modules to its shipyard in South Korea for the final assembly, according to the firm.

Shares of Hanwha Ocean tumbled 5.3 percent at midday after China announced the countermeasures. HD Hyundai Heavy slipped 4.4 percent.

China has called US measures targeting its maritime, logistics, and shipbuilding industries a serious violation of international law and fundamental norms of international relations. (Reuters/Xinhua)