COSCO Shipping, the Chinese country-owned shipping mammoth, has been added to the U.S. Department of Defense (DoD)’s warrants list, alongside 130 other Chinese companies, over alleged links to China’s military.
Impact of the Blacklisting on COSCO and Other Companies
The primary goal of DOD’s list, now involving 134 companies, is to limit their profitability and technological dealings in the U.S. and hamper China’s military influence.
In a Federal Register filing on January 7, 2025, COSCO Shipping, along with its accessories COSCO Shipping (North America) and COSCO Shipping Finance, was labeled a “Chinese martial company” for allegedly furnishing goods or services to support the People’s Liberation Army or related organizations.
Other notable companies on the list are China Shipbuilding Trading (CSTC), China National Offshore Oil Corporation (CNOOC), and China International Marine Containers Group (CIMC). Additionally, also on the list are companies from the dynamism transition region, similar to battery maker Amperex Technology (CATL) and technology leader Tencent.
Although blacklisting these companies doesn’t come with immediate legit warrants or import controls, it could demoralize U.S. companies from engaging with them, potentially causing stock freight declines.
For example, COSCO Shipping eyed a drop of 4.92%, while CNOOC’s prices fell by 3.4% as of January 9, 2025. COSCO Shipping reacted by discrediting the allegations, arguing that it and its accessories comply with all necessary ordinances, calling the allegations unsupported. The company punctuated that none of the listed enterprises are “Chinese martial companies” and committed to work with U.S. authorities to clarify the situation. They also comforted by the fact that the designation doesn’t involve warrants or import controls, and that global missions will remain as usual.
U.S. Seeks to Bolster Domestic Shipping Industry
The U.S. has long leveled to be a global line in navigational trade, but its line of 80 transnational vessels is fragile compared to China’s 5,500 vessels. The country’s dockyards have plodded to produce oceangoing vessels at the needed scale, while the demand for vessels has decreased. To toughen its navigational prowess and compete with China, U.S. lawmakers created the “Vessels for America Act” in late December 2024, aiming to manipulate these differences and fix the country’s disadvantage in the global shipping landscape.
Greece Faces Dilemma Over Piraeus Port and U.S. Ties
COSCO’s involvement in Greece’s Piraeus Port, where it holds a 67% share, is also under scrutiny. Since adding its share in October 2021, COSCO has played a significant part in transforming the port into a major Mediterranean shipping mecca. This cooperation has boosted vessel running capacity, better structured operations, and positively impacted the Greek economy through job production and trade increases. Still, with the U.S. blacklisting COSCO, Greece now faces the challenge of balancing its profitable dependence on the port with its close ties to the U.S.