The US has given the go-ahead for the country’s largest steel producer to sue Chinese rivals, in the first known case in which trade sanctions could…

The US has given the go-ahead for the country’s largest steel producer to sue Chinese rivals, in the first known case in which trade sanctions could be used in retaliation for alleged China government-backed hacking of commercial secrets

The move comes ahead of a meeting of senior US and Chinese officials in Beijing next week. It highlights the increasingly aggressive tactics the US steel industry is using to fight back against the flood of cheap Chinese steel that has hit global markets in recent years, as well as the growing international concerns about industrial overcapacity in China

Depending on the outcome the development could result in the next president authorising a blanket ban on imports of Chinese steel in retaliation for the alleged hacking

US Steel in late April filed the case under the US’s “Section 337” rule, which allows trade sanctions for intellectual property theft

It alleged that some four dozen Chinese companies and their US subsidiaries had both acted as a cartel and benefited from the cyber theft of its production secrets

In a decision last week the US International Trade Commission gave the go-ahead for the case to proceed, setting the stage for a legal battle that experts say will probably take more than a year for an administrative judge to decide

This timeframe could lead to a decision related to arguably the US’s most important commercial relationship early in the next president’s first term. Under the law US presidents are given 60 days to block ITC decisions on Section 337 cases, although according to the ITC “such disapprovals are rare”

Should he win November’s election, a decision in favour of US Steel could give Donald Trump, the Republican presumptive nominee, a way to deliver quickly on his campaign promises to crack down on China and its trade abuses. “If China wants to trade with America, they must agree to stop stealing and to play by the rules,” his campaign website declares

Such a decision by the ITC also could put Hillary Clinton, the Democratic frontrunner, in a difficult position should she win the presidency, leading to an early confrontation with Beijing over a politically sensitive industry

US Steel claims it has widespread support from “local, state and federal officials, trade associations, customers and suppliers, employees, and our union brothers and sisters” for its case

“We strongly believe that Chinese steel producers have engaged in illegal unfair methods of competition, which have created a force with which no market economy can compete,” Mario Longhi, the company’s president said in a statement welcoming the ITC decision

“We remain confident that the evidence will prove the Chinese steel producers engaged in collusion, theft and fraud and we will aggressively seek to stop those responsible for these illegal trade actions.”

Trade lawyers say the case is a novel response to China’s alleged hacking. The alleged cyber attack on US Steel was among those included in a 2014 criminal case brought by the US justice department against five Chinese military officers