US mulls trade sanctions over alleged Chinese cyber-theft

White House discusses measures to punish companies benefitting from plundered trade secrets

Tags: ChinaCyber crimeUSA
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US mulls trade sanctions over alleged Chinese cyber-theft The proposed sanctions would allow officials to freeze assets and prohibit commercial transactions if foreign bodies were found to be engaging in cyber-attacks. (Getty Images)
By  Stephen McBride Published  August 31, 2015

The Obama administration is considering the use of trade sanctions against companies in China that it believes have benefitted from the alleged Chinese hacking of US targets, the Washington Post reported.

The paper claimed a decision could come in the next two weeks on whether to impose the sanctions, which would cover a range of cyber-thefts, including "nuclear-power plant designs, search engine source code and confidential negotiating positions of energy companies".

Chinese President Xi Jinping is due to arrive in the US next month for his first state visit. While lawmakers have at times called for a tougher line from the White House on a number of China-related issues, the depth of trade ties between the two nations has previously prevented US administrations from taking harsh action.

The sanctions being discussed would reportedly allow officials to freeze assets and prohibit commercial transactions if foreign bodies were found to be engaging in cyber-attacks.

"As the president said, when signing the executive order enabling the use of economic sanctions against malicious cyber actors, the administration is pursuing a comprehensive strategy to confront such actors," an unnamed senior administration official said. "That strategy includes diplomatic engagement, trade policy tools, law enforcement mechanisms, and imposing sanctions on individuals or entities that engage in certain significant, malicious cyber-enabled activities."

Another official said: "[The sanctions would] send a signal to Beijing that the administration is going to start fighting back on economic espionage, and it sends a signal to the private sector that we're on your team. It tells China, enough is enough."

Last year China and the US embarked on a series of tit-for-tat moves that started in May, when US prosecutors issued indictments on five Chinese military officers for cyber-crimes. China responded by implementing tough policies on foreign ICT firms operating within its borders, including prohibiting the installation of Microsoft Windows on government PCs.

The sanctions would not cover the data theft at the Office of Personnel Management, which the US has consistently blamed on Chinese actors, because the attack is believed to have been for intelligence purposes, rather than to the benefit of Chinese industry.

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