US-China tit-for-tat moves threaten turmoil at sea

China sanctioned the US units of a South Korean shipping giant and threatened further retaliatory measures on the industry, the latest in a series of tit-for-tat moves as Beijing and Washington jockey for leverage before expected trade talks.

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The sanctions, which prohibit people or organisations in China from transacting with US units of Hanwha Ocean Co, helped fuel a slump in global equities as traders dialed back hopes for an easing of tensions between the world’s largest economies. Hanwha Ocean closed down 6.2 per cent, while shares of Chinese shipbuilders rallied.

Both sides have already slapped special port fees on each other’s vessels, while the US has rallied allies — especially South Korea — to help it revive a moribund American shipbuilding industry. The battle has implications for the global economy, as vessels are responsible for moving more than 80 per cent of international trade.