U.S. Says COSCO ships spy for China
U.S. Officials allege China's COSCO uses concealed ship equipment to collect military intelligence, a claim China's embassy denies.
Two senior Trump administration officials allege China's state-owned shipping giant COSCO uses concealed equipment on its vessels to spy on military communications near the coastlines of the United States and other nations. The officials, who spoke anonymously, described a decades-long intelligence partnership between the shipping firm and Beijing.
They claim the sophisticated signals intelligence equipment, distinct from routine communications hardware, allows China to gather information on military technologies and encryption developments. The effort also reportedly enables Beijing to monitor crucial shipping lanes and maritime routes used for trade and military navigation.
China's embassy in Washington firmly rejected the allegations. Embassy spokesperson Liu Chang told reporters the Chinese government would never ask any company to collect intelligence abroad illegally. "We oppose vilifying China by peddling the so-called 'intelligence collection' narrative, which is totally baseless," Chang said.
U.S. Government Actions and Designations
The Pentagon added COSCO to its list of companies linked to China's military in January 2025. This designation carries reputational costs and U.S. Government procurement bans, though it does not constitute formal sanctions. A separate report from the U.S. Naval War College in April 2025 suggested China's military was likely harnessing commercial shipping and fishing fleets for intelligence gathering.
Despite these security concerns, COSCO remains a major global carrier calling at U.S. ports. It operates several terminal service joint ventures for container ships in the country. Chinese law mandates that the country's firms support government intelligence work.
Trade and Security Policy Context
The allegations emerge as U.S. President Donald Trump and Chinese leader Xi Jinping prepare for a summit in Washington later this month. Security and trade issues are expected to dominate the agenda. The Trump administration had previously planned to impose billions in port fees on Chinese shipping companies, including COSCO, to bolster U.S. Shipbuilding.
That plan was paused after a trade war détente agreement was reached last October. The agreement expires in November, and its potential extension is a likely topic for the upcoming talks.
Expert Analysis on Supply Chain Dependence
Isaac Kardon, an expert in Chinese maritime strategy at Johns Hopkins School of Advanced International Studies, commented on the challenge. He suggested the U.S. Government would find it difficult to address the security concerns decisively due to COSCO's deep integration into American trade networks.
"Taking COSCO out of our supply chains and transport networks could be life-threatening surgery to U.S. Trade networks," Kardon said. COSCO did not respond to Reuters' request for comment on the officials' allegations.
