FT: US pauses sanctions on China’s spy agency to protect trade talks

The United States has suspended plans to impose sanctions on China’s Ministry of State Security in response to a large-scale cyber espionage campaign, aiming to avoid disrupting ongoing trade negotiations between the two economic powers.

Current and former US officials told The Financial Times that the sanctions plan was “put on hold” to preserve the fragile US-China détente.

Washington had initially intended to sanction the Chinese intelligence agency and the contractors allegedly involved in a hacking operation targeting US telecom networks, known as “Salt Typhoon.” While the sanctions are now on hold, the Trump administration still plans to introduce major new export controls against China following an agreement reached in Busan, South Korea.

Several sources told FT that the administration’s China policy has shifted toward maintaining “stability” while the United States works to reduce China’s dominance in rare earth minerals, a dependence that has limited Washington’s ability to take more aggressive measures.

Officials also noted that the decision reflects President Donald Trump’s desire to avoid jeopardising his planned visit to Beijing in April. However, the choice not to sanction Salt Typhoon—an operation that has successfully intercepted unencrypted communications of senior US officials—has frustrated China hawks within the administration.

“The administration appears to be giving ground on export controls to secure President Trump’s trip to Beijing and buy time to diversify critical mineral reliance away from China,” said Zack Cooper, an Asia security expert at the American Enterprise Institute. “I worry that this is simply concessions masquerading as strategy.”

Tensions within the administration have also been fueled by a high-level meeting convened to decide whether to grant licenses allowing Nvidia to export its H200 chips to China. In October, Trump reportedly considered permitting Nvidia to sell an even more advanced chip, the Blackwell, but was dissuaded by advisers from making that move.

In recent weeks, the Trump administration has strengthened coordination on China policy by assigning Stephen Miller, deputy White House chief of staff, the task of ensuring that government departments do not take actions that could disrupt the US-China détente, according to two sources.

Miller assumed this role following complaints from US Treasury Secretary Scott Bessent, who said he was caught off guard by a White House memo raising concerns about Alibaba, the Chinese tech giant.

By Tamilla Hasanova