USA-China: COSCO has been Blacklisted by the Pentagon

The trade war between the USA and China intensifies before Trump takes office.

Again, the US Pentagon has blacklisted the world’s third-largest Chinese shipping company Cosco Shipping due to alleged links to the Chinese military. The updated list newly added China Cosco Shipping Corporation Limited, Cosco Shipping (North America) Inc., and Cosco Shipping Finance Co., Ltd.

Pentagon: Releasing the updated list on 7 Jan, the US Department of Defense said, “Updating the Section 1260H list of „Chinese military companies“ is an important continuing effort in highlighting and countering the People’s Republic of China’s (PRC) Military-Civil Fusion strategy

What is the impact:

1. 500 vessels owned by COSCO will be impacted. This is a significant challenge. While the blacklist designation carries no specific penalties, it aims to discourage US firms & Western companies from conducting business
2. Transpacific connections account for 28% of COSCO’s business volume
3. This measure could benefit European shipping companies
4. However, price increases on the impacted routes are to be expected
5. The weak economies might get another hit, as container shipping is essential for the global economy
6. China will take necessary measures to safeguard the rights of Chinese companies and the country’s legitimate right to development.

COSCO: We emphasize that none of the aforementioned companies are “Chinese military companies.” We will engage with US authorities to clarify this matter.

Also, China’s Government urged the US to” immediately correct its wrong practices and lift the illegal unilateral sanctions and long-arm jurisdiction on Chinese companies.”

Advice: Prepare for a challenging 2025. It will be another tough year, period. Besides economic challenges in many countries, your business will be severely impacted by geopolitical challenges, mainly driven by “not-so-wise” old guys with big egos and a conservative business climate (Businesses AND Consumers).

Monitor your supply chains and get your suppliers, freight forwarders, and supply chain partners on board. And built a Supply Chain Risk Ecosystem to better respond to issues.

Source: SeatradeMaritime, File Photo of a Cosco Shipping VLCC, Credit: Cosco Shipping