YANTAI, CHINA – OCTOBER 27, 2025: A ship under construction is seen at Hanwha Ocean Shandong Co., Ltd. in Yantai, eastern China’s Shandong Province, on Monday, October 27, 2025. Five U.S. subsidiaries of South Korean company Hanwha Ocean have been added to China’s sanctions list to punish them for their role in encouraging the U.S. to impose additional fees on Chinese shippers. Shipyard. (Photo credit: TANG KE / Featured China/Future Publishing via Getty Images)
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Shares in South Korea’s Hanwha Ocean fell about 23% on Tuesday after the company lost Canada’s bid to build its next submarine.
Canadian Prime Minister Mark Carney said Monday that Germany’s thyssenkrupp marine systemsor TKMS will be the preferred supplier for the submarine.
The deal is expected to be a setback for Hanwha Ocean, as it was estimated to be worth up to $100 billion over 30 years, according to the Korea Times.
South Korean President Lee Jae-myung said on his Facebook page that although Canada’s submarine project did not yield the expected results, “with every challenge there are both successes and disappointments. The important thing is that we don’t stop and keep moving forward,” according to a Korean translation of his comments.
TKMS’ 212CD submarine platform is shared by Canada’s closest allies, Germany and Norway. “This announcement marks the beginning of a new chapter in defense cooperation between three close NATO allies, bringing together shared expertise and common security interests,” TKMS said in a statement.
The TKMS contract gives Canada access to Europe’s defense and industrial networks as US President Donald Trump comes under increasing pressure over NATO defense spending.
“Canada’s choice of TKMS should therefore not be interpreted as a rejection of South Korea or the Indo-Pacific region,” said Bina Najibulla, vice-president of research and strategy at the Canada Asia-Pacific Foundation.
“This should be understood as a decision that reflects NATO’s enduring gravitational pull, Arctic capabilities, transatlantic defense industry integration, and procurement risks,” Najibullah said.
