The White House plans to declare sanctions against China on March 22 after deciding that the country encourages theft and transfer of intellectual property from American business.
The Trump administration said the action came after years of talks on the issue, which failed to bring about change.
The actions are expected to include tariffs as well as other measures.
The plans sparked fears of a wider trade war.
According to media reports, the White House is considering tariffs between $ 30 billion and $ 60 billion, as well as measures that would limit investment.
Trade officials also said the United States could also seek to file complaints with the World Trade Organization.
The best trade negotiator in the United States, Robert Lightheiser, told members of Congress on March 21 that the United States sought to put “maximum pressure on China and minimum pressure on American consumers.”
The United States has launched an investigation into China’s intellectual property policies
A US trade spokesman speaking to reporters at a briefing said the United States had evidence that China required companies to form local partnerships to enter the Chinese market as a way to pressure them to transfer technology.
The United States has also found evidence that China is targeting US investment in strategic industries and conducting and supporting cyberattacks.
The findings come from a review of Chinese practices commissioned by President Donald Trump in August called a 301 investigation.
Under Section 301 of the Commercial Code, the US government has given itself the power to unilaterally impose sanctions on countries that it has decided not to trade fairly.
President Trump has repeatedly opposed the huge US trade deficit with China.
There is growing concern in the United States that China is looking for technologies that could be used for military purposes.
Congress also weighed legislation that would increase the government’s power to review foreign business deals, citing the threat posed by state acquisitions of American companies.
China has said there will be no winner in a trade war.
On March 20, the last day of the annual session of the National People’s Congress, Chinese Prime Minister Le Keqiang said he hoped both sides would remain “calm.”
The Chinese prime minister also said he hoped the United States would ease restrictions on exports of high-tech goods to China.