A lawmaker warned that Hanwha Ocean’s U.S. shipyard could lose up to 85 billion won, or approximately 60 million U.S. dollars, over the next two years due to Chinese sanctions.

People Power Party lawmaker Yu Yong-weon of the National Assembly's defense committee said during an audit of the Defense Acquisition Program Administration on Friday that the move was a “politically motivated measure” aiming to disrupt South Korea–U.S. defense cooperation in shipbuilding.

Seok Jong-gun, minister of the Defense Acquisition Program Administration, acknowledged that the sanctions could affect the joint MASGA naval project, though the impact was not yet immediate.

Seok noted that Hanwha’s shipyard might struggle to secure key materials as a result of the restrictions.

He added that the project’s progress depends on the conclusion of a reciprocal defense procurement agreement between Seoul and Washington.

That pact, he said, still requires White House approval, though South Korea has conveyed its strong commitment to moving it forward.