US targets Chinese maritime giants: COSCO and shipbuilding groups

Strict scrutiny of China’s shipping and shipbuilding industries

The United States has added China’s largest shipping company Cosco Shipping Holdings Ltd. and two major shipbuilding companies, China State Shipbuilding Corporation and China Shipbuilding Industry Trading Co., Ltd., to its military blacklist. The move, announced through a Federal Register filing, reflects growing concerns about the companies’ alleged ties to China’s People’s Liberation Army (PLA).

While the blacklist imposes no direct penalties, it serves as a deterrent for U.S. companies from engaging with listed entities and signals heightened scrutiny of China’s dominant maritime sector.

Geopolitical tensions heighten concerns over shipbuilding dominance

China’s shipping industry, which accounts for more than half of global merchant ship production, has become a focus of geopolitical competition between Beijing and Washington. U.S. Congressman Raja Krishnamoorthi said U.S. officials have repeatedly expressed concerns about the gap in shipbuilding capabilities between the two countries, with China building one U.S. container ship for every 359 it produces.

The Pentagon’s blacklist also includes Chinese technology giant Tencent Holdings Ltd., battery maker Contemporary New Energy Technology Co. Ltd. and energy giant CNOOC Ltd., expanding the scope of industries under scrutiny.

Impact on markets and global trade dynamics

After the news was announced, COSCO Group’s stock price in Hong Kong fell by 4.4%, while CNOOC’s decline was smaller, at 1.6%. Neither company commented on the blacklisting. COSCO has previously faced sanctions, including penalties for shipping Iranian oil in 2019, while CNOOC has been sanctioned for its offshore energy business, including projects in the Gulf of Mexico.

Impact on global supply chains

The move comes as supply chains remain under pressure from the disruption caused during the Covid-19 pandemic. The U.S. focus on shipping reflects the growing importance of shipping lines and ports in broader geopolitical competition. Escalating tensions could force Chinese companies such as CNOOC to reconsider their U.S. assets, signaling possible knock-on effects in global trade and energy markets.

Washington’s latest actions highlight the growing competition between the world’s two largest economies, with the maritime sector emerging as a key battleground.