Trump Abandons Plan to Penalize Spy Agency to Prevent Angering Dictator

The Trump administration has reportedly stopped a set of sanctions aimed at China in response to a large-scale espionage campaign, in an effort to protect his trade agreement with President Xi Jinping. According to officials cited by the Financial Times, the sanctions were initially drafted after the Chinese Ministry of State Security allegedly infiltrated several American telecommunications companies, potentially gaining access to targeted phones.

Zack Cooper, an Asian security expert at the American Enterprise Institute, told the Financial Times, The administration seems to be softening export controls to secure President Trumps upcoming trip to Beijing while buying time to reduce dependence on China for critical minerals. Trump has recently reached a temporary truce in the trade war with China.

The cancellation of the sanctions package follows an agreement between Trump and Xi during a summit in South Korea in October to pause the trade conflict. The White House is reportedly considering additional exemptions in the tariff regime, particularly for Nvidia, led by Trump ally Jensen Huang, to allow the sale of more advanced AI chips to China.

Sources told the Financial Times that the administration is focusing on maintaining stable relations with China as the U.S. aims to challenge Chinas control over rare earth minerals, and as Trump plans a state visit to Beijing next April. Michael Sobolik, a China specialist at the Hudson Institute, warned, Xi has a history of reneging on commitments to U.S. leaders, and the Chinese Communist Party often uses negotiations to gain strategic time. President Trump must be wary of this risk.

Behind the scenes, senior MAGA officials are reportedly preparing for a private summit to discuss whether Nvidia should be allowed to sell its most advanced AI systems to Chinese customers. The company had previously received exceptions in the tariff regime in exchange for payments to the White House, a move that sparked criticism. Some advisers have expressed concern that allowing more advanced chip sales could weaken the U.S. position in the global AI race.

Additionally, Trump has reportedly appointed Deputy Chief of Staff Stephen Miller to ensure federal agencies refrain from actions that might jeopardize the truce with China.

Author: Ethan Caldwell