(Bloomberg) -- The US has blacklisted China’s largest shipping line and two shipbuilders over alleged links with the People’s Liberation Army, as Washington turns its attention to the country’s massive maritime sector.

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Cosco Shipping Holdings Co. was named in a Federal Register filing on Tuesday, qualifying it as a Chinese military company as determined by the Pentagon, along with China State Shipbuilding Corp. and China Shipbuilding Trading Co. While the blacklist carries no specific penalties, it discourages US firms from dealing with those companies.

It also signals increased scrutiny of marine transport and shipbuilding as Donald Trump prepares to return to the White House. China has the world’s largest shipbuilding sector, producing more than half of merchant vessels globally, while the US industry has virtually collapsed over the last generation.

Chinese shipbuilders accounted for almost 60% of the worldwide orderbook in the first quarter of last year, according to shipbroker BRS. The US’s nervousness over this dominance comes as shipping lines and ports become increasingly important as arenas of geopolitical competition, with Covid-19 and its aftermath exposing the fragility of global supply chains.

Washington telegraphed its unease over China’s shipbuilding industry at Senate hearings last year. The US builds only one container ship for every 359 such vessels that China constructs, Raja Krishnamoorthi, a Democratic congressman for Illinois, said at the time.

The latest Pentagon blacklist also included Tencent Holdings Ltd. and Contemporary Amperex Technology Co. Ltd., as well as Chinese oil major Cnooc Ltd.

Cosco shares fell as much as 4.4% in Hong Kong on Tuesday, outpacing a decline in the city’s benchmark stock index, while Cnooc was down as much 1.6%.

The two companies didn’t respond to requests for comment.

Both Cosco and Cnooc have been previously targeted by Washington. Cosco was sanctioned in 2019 for hauling Iranian oil, with those penalties lifted in 2020. Cnooc was one of the earliest Chinese state-owned enterprises to be hit with US sanctions and was also added to a Pentagon blacklist in 2021.

Cnooc, meanwhile, has two onshore shale oil and gas projects in the US, two deepwater projects and interests in several other exploration blocks in the US Gulf of Mexico, according to Bloomberg Intelligence. Rising tensions with Washington could cause the company to reassess its ownership of those assets, it said in a note late last month.

Story Continues

--With assistance from Sarah Chen.

(Updates with new details throughout)

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