US Is (Almost) Ready to Impose Economic Sanctions on China Over Cyberespionage

Recent Features


US Is (Almost) Ready to Impose Economic Sanctions on China Over Cyberespionage

Economic sanctions against Chinese companies and individuals could be imposed within the next two weeks.

US Is (Almost) Ready to Impose Economic Sanctions on China Over Cyberespionage
Credit: China cyber image via Shutterstock

The Obama White House is considering imposing sanctions on Chinese companies and individuals who have benefited from Chinese state-sponsored cyber espionage activities and the theft of U.S. trade secrets or who have engaged in destructive cyberattacks, the Washington Post reports.

Sanctions–including the freezing of financial assets and barring commercial transactions with–could be imposed within the next two weeks but no final decision has been taken so far, according to administration officials interviewed by the Washington Post.

In April 2015, U.S. President Barack Obama signed an executive order establishing the first-ever sanctions program specifically meant to deter state-sponsored malicious activities in cyberspace on a strategic scale declaring “significant malicious cyber-enabled activities” a “national emergency.”

“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,” according to an administration official interviewed by the Post.

“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,” he added.

Another administration official stated that the threat of sanctions “sends 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.”

The recent revelations of the potential imposition of economic sanctions are in line with an overall tougher U.S. stance on Chinese state-sponsored cyberespionage activities.

As I reported before, for example, in May of this year, the chief of U.S. Cyber Command reiterated that the United States will step up its active cyber defense postures in order to deter attacks on U.S. critical information infrastructure (see: “US: Hackers Will Pay a Price for Cyber Attacks”).

In April, the Pentagon has also released a new cyber strategy document to strengthen the United States’ “cyber defense and cyber deterrence posture.” The document specifically addresses Chinese cyber espionage activities and what escalatory steps the United States military would take to deter Chinese aggression in cyberspace.

The current threat of economic sanctions comes at a particular sensitive time since Chinese President Xi Jinping is scheduled to go to the United States on an official state visit this September. Perhaps, by threatening sanctions,  it is the Obama White House’s intention to elevate the subject of cyberespionage to a more strategic level between the two sides during bilateral discussions.