THE NEW YORK TIMES INTERNATIONAL EDITION THURSDAY, AUGUST 1, 2019 | 7

Business

As trade talks between the United

States and China resumed on Tuesday in

Shanghai, President Trump began play-

ing down the likelihood of a deal before

the 2020 election.

The president’s comments, which

came as top negotiators from the two

countries were sitting down to dinner at

the Fairmont Peace Hotel, underscored

the diminishing prospects for a transfor-

mative trade deal anytime soon and the

extent to which the bilateral relation-

ship has not unfolded in the way that Mr.

Trump expected.

“I think the biggest problem to a trade

deal is China would love to wait and just

hope,” the president said. “They hope —

it’s not going to happen, I hope, but they

would just love if I got defeated so they

could deal with somebody like Elizabeth

Warren or Sleepy Joe Biden or any of

these people, because then they’d be al-

lowed and able to continue to rip off our

country like they’ve been doing for the

last 30 years.”

Mr. Trump’s remarks were fueled, in

part, by the fact that China has not be-

gun buying large amounts of American

agricultural goods, which the president

promised farmers would happen after a

meeting with President Xi Jinping of

China in June.

Mr. Trump emerged from that meet-

ing in Osaka, Japan, saying he had

agreed to postpone tariffs on an addi-

tional $300 billion worth of Chinese

products and allow American firms to

get around a government blacklist and

continue selling technology to Huawei,

the Chinese telecom giant. In return, Mr.

Trump said that China would immedi-

ately start buying “a tremendous

amount of food and agricultural prod-

uct” and that American farmers “are go-

ing to be a tremendous beneficiary.”

But no such purchases have hap-

pened, and, in the weeks since, Chinese

officials have disputed that they had

agreed to buy more farm products as a

condition of the talks. On Sunday, Chi-

nese state media reported that “millions

of tons” of American soybeans had been

shipped to China. But Mr. Trump on

Tuesday said no such purchases had

materialized.

China “was supposed to start buying

our agricultural product now — no signs

that they are doing so,” Mr. Trump

tweeted. “That is the problem with

China, they just don’t come through.”

His comments on Tuesday seemed

aimed at giving American negotiators

more leverage and putting pressure on

China for concessions during this

week’s talks. Mr. Trump took credit for

China’s weakening economy, saying the

tariffs he has placed on $250 billion

worth of Chinese goods have put enor-

mous pressure on the country, costing it

jobs and prompting companies to leave.

But he seemed to veer between goad-

ing China to quickly accede to America’s

demands and suggesting that the coun-

try could get a better deal if it waited and

a Democrat won the 2020 presidential

election.

“China is dying to make a deal with

me. But whether or not I’ll do it — it’s up

to me, it’s not up to them,” Mr. Trump

said. “I think China is willing to give up a

lot, but that doesn’t mean I’m willing to

accept it.”

Stocks dipped on Tuesday as invest-

ors grew nervous about a prolonged

trade war between the world’s two larg-

est economies. The S&P 500 was down

0.3 percent for most of the trading day.

The president’s remarks have been

matched by strident rhetoric on the Chi-

nese side. At a news conference on Mon-

day, Hua Chunying, a spokeswoman for

the Ministry of Foreign Affairs, called

the United States “capricious, arrogant

and selfish” after the Trump administra-

tion challenged China’s claim to a spe-

cial status for developing countries at

the World Trade Organization.

“There is a catchphrase that got popu-

lar just recently in China: ‘Don’t do

things like the U.S. does.’ I hope some

people of the U.S. side can deeply reflect

on it,” she said.

The United States and China have

been locked in a protracted trade war for

more than a year, imposing tariffs on

each other’s products while carrying on

a series of on-again, off-again negotia-

tions. Mr. Trump has made getting

tough on China a central promise of his

administration, and his advisers have

pressed the Chinese to open their mar-

ket to American companies, purchase

more American products and strength-

en their protections for intellectual

property — with limited success.

Mr. Trump has been dismayed as each

of his advisers returned to Washington

with promises from the Chinese that he

believed weren’t tough enough. In May,

talks collapsed completely after Mr.

Trump accused Beijing of reneging on a

deal.

Negotiators from the two countries

will try to bridge their divisions as talks

began in earnest in Shanghai on

Wednesday. But the deep divisions be-

tween the countries suggest another

protracted round of talks may be needed

before any agreement can be reached.

The text that the two countries have

been negotiating is highly secret. But

American and Chinese negotiators ap-

pear to still have significant differences

of opinion over how China should en-

shrine changes, including new protec-

tions for American intellectual property

in its laws and regulations, how many

American products China would agree

to buy as a result of the deal, and how

many of Mr. Trump’s tariffs on $250 bil-

lion in Chinese goods would remain in

place after an agreement is struck.

The president continues to insist that

he faces no immediate deadline to reach

an agreement. On Tuesday, he repeated

his claim that the United States econ-

omy is benefiting from the billions of dol-

lars his tariffs are generating and that

all the pain of the trade war was being

felt on the Chinese side. That view is not

supported by businesses and econo-

mists, who say Mr. Trump’s trade war is

starting to take a toll on the United

States economy.

Chinese leaders have also insisted

that the country can withstand the pres-

sure of the trade war as it waits for a bet-

ter deal from the Trump administration,

or another president.

In reality, both economies are

presenting more of a mixed picture, with

the effects of the trade war clearly being

felt, but not so intensely that their lead-

ers can’t ignore it.

The Chinese economy is decelerating

gradually, but further increases in the

country’s already giant infrastructure

spending have cushioned the shock.

Chinese exports to the United States

have fallen 8.5 percent in the first half of

this year compared with the same peri-

od last year, while exports to the rest of

the world have been up slightly.

Sales of cars and other big-ticket pur-

chases in China had tumbled sharply

last autumn when Mr. Trump broadened

his tariffs to $250 billion a year of goods

from $50 billion. But Chinese consumer

confidence now seems to have flattened

at a level best described as still very

glum, but not rapidly deteriorating fur-

ther.

In the United States, gross domestic

product, a broad measure of the

strength of the American economy,

came in at an annualized 2.1 percent in

the second quarter, a decent pace but

slower than the 3.1 percent rate posted

in the first three months of the year.

On Tuesday, Mr. Trump again blamed

the Federal Reserve for taking some

steam out of the economy, saying that

both the stock market and economic

growth would have been stronger if the

Fed had not raised interest rates last

year. Mr. Trump called on the Fed to en-

act a large rate cut, just a day before the

central bank is widely expected to lower

rates for the first time since 2008.

Chinese officials have disputed President Trump’s contention that they had agreed to

buy more farm products as a condition of resuming trade talks.

CHARLES MOSTOLLER/REUTERS

President sees delay

in deal with China

WASHINGTON

Trump suggests Beijing

is waiting for the election

and hoping for his defeat

BY ANA SWANSON

AND JEANNA SMIALEK

Keith Bradsher contributed reporting

from Shanghai.

“China is dying to make a deal

with me. But whether or not

I’ll do it — it’s up to me, it’s not

up to them.”

Large financial companies have to

thwart hundreds of thousands of cyber-

attacks every single day. Data thieves

have to get lucky only once.

Big banks like Capital One, the victim

of a recent attack that captured the per-

sonal information of over 100 million

people, are a target for both digital trou-

blemakers such as individual hackers

trying to impress their peers and intelli-

gence operatives for foreign govern-

ments.

A single weak spot is all that savvy

hackers need. And they often find one.

Already this year there have been 3,

successful cyberattacks against finan-

cial institutions, according to reports

filed with the United States Treasury

Department’s Financial Crimes En-

forcement Network.

Federal law enforcement officials said

on Monday that Paige Thompson, a soft-

ware engineer in Seattle who used to

work for Amazon, got into Capital One’s

computer network through what the

bank described as a “configuration vul-

nerability” in its security software. It

was akin to leaving a window open

overnight at the local bank. Once inside,

she was able to download an array of

personal material from customers, in-

cluding credit card applications and So-

cial Security numbers, according to

court documents.

Security experts are likely to home in

on the apparently simple mistake made

by software developers at Capital One,

said Jack Jones, the chairman of the

FAIR Institute, a cybersecurity trade

group. But simple mistakes are common

in online security.

Every big organization faces so many

threats from so many sources that it can

be hard to decide what is important.

Mastercard, for example, combats some

460,000 intrusion attempts in a typical

day, up 70 percent from a year ago.

“They’re lost in noise,” Mr. Jones said.

“Nobody has this nailed down.”

The Capital One episode is a reminder

of the intricacy of the computer net-

works at large financial institutions, and

of their vulnerability. Over the last sev-

eral years, companies including Equifax

and Morgan Stanley have been attacked

with various hacking methods.

In some cases, the hackers have taken

advantage of weak passwords or sent

fake emails loaded with malicious com-

puter code that helped them get inside

the network. In others, they have

scanned for software that hasn’t been

kept up to date with the latest security

fixes. Some hacks took hours. Others

took months. “The very best hackers in

the world are hacking these banks, and

it’s a full-fledged arms race,” said Tom

Kellermann, the chief cybersecurity of-

ficer at Carbon Black, a maker of securi-

ty software.

It is unclear whether any sort of insid-

er information helped Ms. Thompson

break into the Capital One network, as

prosecutors allege. Though her online

résumé indicated that she had a wide

range of programming skills, it did not

appear that the breach of the bank’s

computer systems had been particu-

larly sophisticated.

Three years ago, Ms. Thompson

worked for Amazon Web Services, the

cloud computing service that hosted

Capital One’s data. But she left the com-

pany long before the breach. Amazon

manages the guts of Capital One’s net-

work — the servers and networking

technology that hold it together. The

software that Ms. Thompson is alleged

to have targeted would have been man-

aged by the bank itself.

Ms. Thompson used a gap in Capital

One’s firewall software — a security sys-

tem that acts like a digital gate — to gain

security credentials, according to court

documents. Then she gained access to

customer records that Capital One had

stored on Amazon’s cloud service.

Representatives of Capital One re-

fused to answer questions about

whether Ms. Thompson had hacked into

its systems or simply climbed through a

window that had accidentally been left

open. “These things happen because of

human nature,” said Chris Vickery, a se-

curity researcher who specializes in

finding unguarded data caches. “These

systems are very complex and very

granular. People make mistakes.”

More than 11 billion records are

known to have been exposed in data

breaches since 2005, according to a

tracker maintained by the Privacy

Rights Clearinghouse. In recent years,

huge caches of sensitive data have been

The Capital One hacker was able to download an array of personal data, including credit card applications and Social Security numbers, according to court documents.

DREW ANGERER/GETTY IMAGES

Banks besieged by hackers

BY STACY COWLEY

AND NICOLE PERLROTH

HACKED,PAGE

All a hacker needs is a single

gap in an institution’s armor.

Over months of discussions in online

forums earlier this year, Paige Thomp-

son acknowledged the personal chal-

lenges in her life: suicidal thoughts,

struggles to find employment and diffi-

culties she had faced since transitioning

to a woman years before.

But those who knew her were none-

theless stunned by what came next: the

arrest of Ms. Thompson on Monday on

charges that she had stolen the personal

data of over 100 million Capital One

customers.

Ms. Thompson, 33, had spent years

lurching between a promising career as

a software developer and a life of up-

heaval that alienated her from her

friends. While she at times found com-

munity among fellow computer engi-

neers, she on other occasions grew con-

frontational with them.

“It was just a lifelong thing for her,”

said Sarah Stensberg, a former friend.

“When she gets in these phases of inten-

sity, she does really stupid things. She’ll

push everyone away. She’ll write threat-

ening emails. She’ll post things online

about the things she’s doing.”

That is in part how United States in-

vestigators tracked Ms. Thompson, who

went by the online persona “erratic.”

Prosecutors described how she seemed

to boast about the data theft to those in

her online community.

“I’ve basically strapped myself with a

bomb vest,” she wrote in a Slack post, ac-

cording to prosecutors.

Ms. Thompson was arrested on Mon-

day on charges of computer fraud and

abuse. Capital One said the intrusion af-

fected about 100 million people in the

United States and Canada. The break-in

compromised about 140,000 Social Se-

curity numbers and about 80,000 bank

account numbers, Capital One said,

along with about a million Social Insur-

ance numbers of Canadian customers.

A lawyer for Ms. Thompson did not re-

turn a call seeking comment.

Ms. Stensberg said her husband and

Ms. Thompson knew each other as teen-

agers as part of a computer program-

ming group in the Seattle area. Ms.

Thompson had grown up in a troubled

home, at one point moving out to live

with another software developer, Ms.

Stensberg said.

Not even 20 years old in 2005, Ms.

Thompson had left Bellevue Communi-

ty College in Washington State to begin

working a series of software develop-

ment jobs, according to her résumé. But

Ms. Stensberg, who said she met Ms.

Thompson around 2010, recalled her

disruptive behavior as immediately ap-

parent.

At one point, Ms. Stensberg said, she

and her husband took Ms. Thompson to

the hospital to get her into an inpatient

treatment center. Later, after having

continued issues, Ms. Stensberg said

she and her husband attempted to cut

ties with Ms. Thompson.

“He always said she had a lot of poten-

tial to be very focused and do a lot in this

world,” Ms. Stensberg said.

Despite the troubles, Ms. Thompson’s

technical expertise helped her land a job

at Amazon Web Services in 2015, ac-

cording to her résumé. She stayed there

for a little more than a year.

Amazon Web Services hosts the Capi-

tal One database that was breached,

part of the company’s broader line of

business that involves remote data serv-

ers that companies use to store informa-

tion. Large enterprises like Capital One

typically build their own web applica-

tions on top of Amazon’s cloud architec-

ture.

F.B.I. officials said in court documents

that Ms. Thompson had managed to

gain access to the Capital One data

through a “misconfiguration” of a fire-

wall on a web application, allowing her

to communicate with the server where

the information was stored.

In search warrant records, federal in-

vestigators in Ms. Thompson’s case re-

ported that they had seized numerous

devices from her and found items refer-

ring to both Capital One and Amazon,

along with “other entities that may have

been the targets of attempted or actual

network intrusions.”

After Ms. Thompson left Amazon, Ms.

Stensberg said, she and her husband

continued to face problems with her.

That ultimately led the couple to file for

a protective order, with Ms. Stensberg

and her husband both describing Ms.

Thompson as engaging in stalking and

harassment, including messages that

included their home address.

Aife Dunne, an online friend, began

getting to know Ms. Thompson around

the same time and remembered Ms.

Thompson discussing in their initial

conversation whether to take her life.

Ms. Thompson, a collector of vintage

electronics, talked about how she hadn’t

been employed in many months.

Her résumé, which she would share in

online forums to seek improvements,

was extensive. She listed extensive

skills in programming languages,

scripts, networking and Amazon Web

Services. Ms. Dunne said she was com-

petent or even advanced in her develop-

er skills. Ms. Thompson ran a group on

Meetup called Seattle Warez Kiddies, a

small collective of programmers and

hackers.

But Ms. Dunne recalled Ms. Thomp-

son talking about the struggles of her

transition and how, from Ms. Thomp-

son’s perspective, it made it difficult for

her to associate with people profession-

ally. Years earlier, on a personal blog,

Ms. Thompson had discussed her strug-

gles with exploring reassignment

surgery. “I think really what I want and

need is friends,” she wrote at the time. “I

think my problems with acceptance

come from the fact that I have so few

friends to accept me when I could.”

Ms. Dunne said there were still times

in recent months when Ms. Thompson

would sink into dark phases and have lit-

tle support outside of her online commu-

nities. “You wish there was someone in

her life that she had someone to talk to,”

Ms. Dunne said.

Capital One has said it believes the in-

trusion occurred in March of this year,

and federal prosecutors say a GitHub

user alerted Capital One to the possible

intrusion on July 17.

In recent days, Ms. Thompson wrote

on her Twitter page about having a ther-

apist appointment and about her dying

cat. And she made reference to some-

thing momentous that was going to re-

sult in her losing her freedom.

“After this is over I’m going to go

check into the mental hospital for an in-

definite amount of time,” she wrote on

Twitter. “I have a whole list of things that

will ensure my involuntary confinement

from the world. The kind that they can’t

ignore or brush off onto the crisis clinic.

I’m never coming back.”

Software developer’s online handle was ‘erratic’

SEATTLE

A look at the woman

who was arrested in

the Capital One breach

BY MIKE BAKER

Hallie Golden and Karen Weise contrib-

uted reporting.

Paige Thompson had spent years lurching

between a promising career as a software

developer and a life of upheaval.

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