US, China set to take action against each other as tensions rise

Date: December 12, 2018
By: Nicole Gaouette, Donna Borak and David Shortell, CNN

Washington (CNN)China and the US are set to take action against each other as tensions escalate over trade, cyber hacking and espionage as US senior law enforcement officials identified Beijing as the most serious threat to US national security on Wednesday.

China’s methods of non-traditional espionage — including their use of ordinary Chinese expatriates instead of spies at universities and businesses, and intellectual property theft — were explained by officials from the FBI and departments of Justice and Homeland Security who briefed US lawmakers.

“As the United States proceeds a whole of society response to this threat, we must address the vulnerabilities within our system while preserving our values and the open, free and fair principles that have made us thrive,” E.W. Priestap, the FBI’s assistant director of counterintelligence told the Senate Judiciary Committee. “What hangs in the balance is not just the future of the United States, but the future of the world.”

A bargaining chip

Priestap and his colleagues testified hours after Secretary of State Mike Pompeo confirmed in an interview with Fox News that the US believes Beijing was behind the massive cyberattack on the Marriott hotel chain. The New York Times reported the assault was part of a broader Chinese operation that also targeted health insurers and the security clearance files of millions of Americans.

Those disclosures come a day after President Donald Trump told Reuters he would be willing to use a Chinese tech executive arrested for violating US sanctions on Iran as a bargaining chip in his trade war with Beijing, which for now is in a 90-day pause.
“If I think it’s good for what will be certainly the largest trade deal ever made — which is a very important thing — what’s good for national security — I would certainly intervene if I thought it was necessary,” Trump said in the interview.

US business executives have been bracing for further retaliation from China, which has called for the release of Meng Wanzhou, chief financial officer of Huawei and the daughter of the communications giant’s founder, following the detainment of a former Canadian diplomat on Tuesday. A Canadian judge granted Meng a $7.5 million bail, while she awaits extradition to the United States.

Retaliation planned

“The Huawei arrest was enormously unpopular in China and there is some retaliation planned for by security services. You’re likely to see more things like that in the next bit,” said a source familiar with ongoing trade negotiations, referring to the diplomat’s detainment.