US accuses COSCO of spying with hidden gear on ships

Senior Trump administration officials on Tuesday accused Chinese state-owned shipping giant COSCO of using concealed signals intelligence equipment aboard its commercial vessels to intercept military communications near the coastlines of the United States and other nations, according to an exclusive report by Reuters.reuters

The two officials, speaking on condition of anonymity, described a decades-long intelligence-collection partnership between COSCO and Beijing that enables China to monitor vessels, aircraft, key shipping lanes, and military encryption developments across Europe, North America, and Asia. They characterized the equipment as "sophisticated signals intelligence collection" platforms rather than routine communications hardware.reuters

COSCO did not respond to Reuters' request for comment. China's embassy in Washington rejected the allegations, with spokesperson Liu Chang calling the intelligence-gathering narrative "totally baseless" and saying Beijing would never ask any company or individual to "collect or provide data, information or intelligence located abroad against local laws".reuters

A Broader Pattern of Concern

The accusations build on an existing trail of U.S. scrutiny over Chinese commercial maritime operations. The Pentagon added COSCO to its list of companies linked to China's military in January 2025, a designation that carries reputational consequences and federal procurement bans but does not constitute formal sanctions. A report published by the U.S. Naval War College in April 2025 assessed it as likely that China's People's Liberation Army was harnessing commercial shipping and fishing fleets for intelligence and surveillance.reuters

Chinese law requires domestic firms to support government intelligence work, a legal framework that U.S. officials have long cited as a structural concern.tradersunion+1

Trade Implications Ahead of Trump-Xi Summit

The timing of the allegations is notable. President Donald Trump and Chinese leader Xi Jinping are expected to meet in Washington later in September, where they plan to discuss a range of sensitive security and trade issues. A trade war détente reached between the two leaders last October is set to expire in November, and a possible extension is expected to be on the agenda.reuters

The Trump administration had previously planned billions of dollars in port fees targeting Chinese shipping companies, including COSCO, to revitalize U.S. shipbuilding, but paused the initiative after the trade agreement. Despite the security concerns, COSCO remains one of the world's top shipping companies calling at U.S. ports and operates several terminal service joint ventures there.reuters

Isaac Kardon, an expert on Chinese maritime strategy at Johns Hopkins School of Advanced International Studies, told Reuters that addressing the security risks would be difficult given COSCO's deep integration into American commerce. "Taking COSCO out of our supply chains and transport networks could be life-threatening surgery to U.S. trade networks," Kardon said.reuters