COSCO faces U.S. security allegations over intelligence-gathering equipment on ships

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COSCO U.S. security allegations

Highlights

COSCO faces U.S. allegations of using sophisticated concealed signals intelligence platforms on ships to collect military and trade communications across multiple regions.
In January 2025, the Pentagon designates COSCO as linked to China's military, risking reputational harm and U.S. procurement bans but not formal sanctions.
COSCO remains a major operator at U.S. ports with terminal joint ventures, complicating U.S. security and trade response due to deep integration in supply chains.

U.S. allegations ahead of Trump-Xi talks

As reported by Reuters, two senior Trump administration officials say COSCO has a decades-long intelligence-collection partnership with Beijing that allows China to gather communication signals from vessels and aircraft operating across Europe, North America and Asia.

The officials say the concealed systems aboard COSCO ships are sophisticated signals intelligence collection platforms rather than routine communications hardware. One official says the equipment is intended to gather information on military communications technologies and encryption developments, while also helping Beijing monitor key shipping lanes and maritime routes important for trade and military navigation.

The officials also say the information is used to strengthen China's position in territorial disputes and to provide maritime reconnaissance and early-warning indications of foreign military targets. They do not detail the type of equipment allegedly being used.

COSCO does not respond to a request for comment in the report. China's embassy in Washington rejects the allegations, with spokesperson Liu Chang saying Beijing would never ask any company or individual to collect or provide data, information or intelligence abroad in violation of local laws, and calling the U.S. narrative baseless.

Shipping, military links and trade exposure

A report published by the U.S. Naval War College in April 2025 says it is likely that the People's Liberation Army is harnessing China's fishing and commercial shipping fleets for intelligence and surveillance work. The Pentagon also places COSCO on its list of companies linked to China's military in January 2025, a designation that can bring reputational damage and U.S. government procurement bans, though not formal sanctions.

Chinese law requires companies to support government intelligence work, yet COSCO remains one of the top global shipping groups calling at U.S. ports and holds several terminal service joint ventures for container ships there. That commercial footprint complicates any U.S. response as Washington weighs broader security and trade policy toward China.

The Trump administration last year plans billions of dollars in port fees on Chinese shipping companies, including COSCO, to revive U.S. shipbuilding and maritime industries, but pauses the plan after Trump reaches a year-long trade war détente with Xi in October. That agreement expires in November, and a possible extension is expected to feature in the September summit talks.

Isaac Kardon, an expert in Chinese maritime strategy at Johns Hopkins School of Advanced International Studies, says the U.S. government is likely to face difficulty addressing the concerns because COSCO is deeply embedded in U.S. trade networks. He says removing COSCO from supply chains and transport networks could amount to life-threatening surgery for U.S. trade.

In our earlier article on escalating U.S.-Canada trade tensions, we examined how Washington’s renewed pressure on Ottawa risked undermining the USMCA framework and decades of North American economic integration. We highlighted the potential spillover into closely linked supply chains—especially in aluminium and autos—and the broader economic and security costs of turning trade disputes into long-term strategic friction.

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