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.