Trump administration escalates trade secrets fight with China

The Trump administration is stepping up its efforts to target China over economic espionage, simultaneously ...

Posted: Nov 2, 2018 5:08 PM
Updated: Nov 2, 2018 5:08 PM

The Trump administration is stepping up its efforts to target China over economic espionage, simultaneously announcing a new initiative to combat trade theft and charges involving alleged crimes against an Idaho semiconductor company.

The Department of Justice unsealed an indictment Thursday alleging a state-backed Chinese firm, a Taiwanese company, and three Taiwanese individuals committed conspiracy to steal trade secrets from Micron, which makes memory chips.

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"Chinese economic espionage against the United States has been increasing — and it has been increasing rapidly. We are here today to say, 'enough is enough.' We're not going to take it anymore," said Attorney General Jeff Sessions at a press conference.

It came as US President Donald Trump held his first phone conversation in months with Chinese leader Xi Jinping, amid rising economic and political tensions between the two major powers.

The two leaders discussed trade tensions as well as the ongoing efforts to smooth relations with North Korea, in a chat described by Trump as "long and very good."

"Those discussions are moving along nicely with meetings being scheduled at the G20 in Argentina," the US President said on his Twitter, confirming a likely meeting between the two in Buenos Aires in November.

But the conversation is unlikely to halt US efforts to crack down on alleged theft of technology by Beijing, with three broad indictments issued against Chinese intelligence agents by the Department of Justice in October alone.

Trade secrets stolen

The three individuals named in the indictment worked for Micron's Taiwanese subsidiary. They later went to work for United Microelectronics Corporation in Taiwan where they are alleged to have orchestrated stealing trade secrets from Micron.

The Taiwanese company partnered with the Chinese company Fujian Jinhua Integrated Circuit Co. and shared technology, according to the Justice Department.

In a statement the United Microelectronics Corporation said the allegations were identical to a separate civil complaint by Micron and complained the US Attorney's Office hadn't notified them of the charges in advance.

"UMC takes seriously any allegation that it may have violated any laws and fully intends to respond to these allegations accordingly," the company statement said.

Contact information for Fujian Jinhua could not be found and its website appeared to be down on Thursday afternoon.

A Micron spokesman said the company welcomed the Justice Department's decision to prosecute.

"Micron has invested billions of dollars over decades to develop its intellectual property. The actions announced today reinforce that criminal misappropriation will be appropriately addressed," he said.

The United States had already delivered a sharp blow to Fujian Jinhua on Monday, when the Commerce Department said it would restrict American companies from selling software and technology to the Chinese-backed firm. The ban could bring the chipmaker, which relies on foreign tech, to its knees.

Also this week, the Justice Department charged two Chinese intelligence officers with trying to steal the details for a type of jet engine technology from US-based companies.

These actions are adding to tensions between Beijing and Washington over trade. The two economic powers have slapped tariffs on billions of dollars of imports this year, and President Donald Trump has threatened to impose duties on the remaining Chinese imports if Beijing does not change its trade policies.

In recent months the chilling of relations has even expanded from trade into a broader and political and diplomatic confrontation, with US Vice President Mike Pence accusing China of trying to interfere in the US midterm elections.

Larry Kudlow, director of the President's National Economic Council, also showed some optimism Thursday over talks with China on trade.

"There may be a little thaw going on here," he said outside the White House.

But Kudlow also dinged Beijing, crowing that the US is doing better than the rival superpower.

"I think their economy is sloppy," Kudlow said. "I'm just saying, from our view, we're booming. China's not."

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