Two senior Trump administration officials have alleged that China’s state-owned shipping giant COSCO uses concealed equipment on its vessels to collect military communications near the coastlines of countries it targets, including the United States. The officials said COSCO has maintained a decades-long intelligence-collection partnership with Beijing.

According to an exclusive Reuters report, the alleged arrangement allows China to collect communication signals from vessels and aircraft operating across Europe, North America and Asia. One of the officials said the advanced equipment installed on COSCO ships is designed to collect information about “military communications technologies and encryption developments.” This arrangement gives Beijing the ability to monitor important shipping lanes and maritime routes used for global trade and military navigation, the official said.

The officials did not identify the exact type of equipment allegedly installed on the ships. They described the systems as “sophisticated signals intelligence collection” platforms rather than standard communications equipment. The alleged systems could allow Chinese authorities to gather sensitive information from military and other strategic communications operating near key maritime areas.

The officials said Beijing uses the information collected through the alleged programme to strengthen its position in territorial disputes. The data also provides maritime reconnaissance and early-warning indications of foreign military targets. Such information could help China track military activity and understand the communications capabilities of other countries.

COSCO did not respond to a Reuters request for comment on the allegations. China’s embassy in Washington rejected the claims and accused the United States of spreading an unfounded narrative about Chinese intelligence activities.

“Vilifying China”, China’s embassy said the Chinese government would never ask any company or individual to “collect or provide data, information or intelligence located abroad against local laws.”

“We oppose vilifying China by peddling the so-called 'intelligence collection' narrative, which is totally baseless,” embassy spokesperson Liu Chang told Reuters.

The allegations come as Washington continues to raise concerns over the relationship between Chinese commercial shipping companies and China’s military and intelligence agencies. The United States has increasingly focused on the role that civilian vessels and companies could play in supporting China’s broader surveillance and military objectives.

A report released by the US Naval War College in April 2025 said it was likely that China’s People’s Liberation Army (PLA) was using the country’s fishing and commercial shipping fleets for intelligence and surveillance operations. The report added to concerns in Washington about the potential use of civilian maritime networks for military purposes.

The Pentagon added COSCO to its list of companies linked to China’s military in January 2025. The designation does not amount to formal sanctions, but it can have major reputational consequences for the company. It can also lead to US government procurement bans, creating difficulties for companies included on the list.

Chinese law also requires companies in the country to support government intelligence work. This has added to concerns among US officials over the possible involvement of Chinese state-owned and private companies in intelligence activities.

Despite these concerns, COSCO continues to rank among the world’s leading shipping companies and regularly calls at US ports. The company also has several terminal service joint ventures connected to container operations at US ports. Its presence in the US maritime sector makes the latest allegations particularly significant for Washington.

The Trump administration had also planned to impose billions of dollars in port fees on Chinese shipping companies, including COSCO. The move formed part of a broader effort to revive the US shipbuilding sector and strengthen the country’s maritime industry.

The plan was later paused after US President Donald Trump reached an agreement with Chinese President Xi Jinping last October. The agreement created a year-long period of reduced trade tensions between the two countries. It is due to expire in November. A possible extension is expected to be discussed during September talks between Trump and Xi.

The latest allegations could add another layer of tension to the already complex US-China relationship. They also highlight Washington’s continued concerns over the use of Chinese commercial and state-owned shipping networks for activities with military and intelligence implications.