Trump Scraps Proposed Sanctions on China’s Spy Agency
December 4, 2025—A year after it became known that the Chinese government hacked into the U.S. telecommunications systems, gaining access to millions of phones, the systems remain vulnerable to spying, according to senators, a panel of experts, and officials at the Federal Communications Commission.
“Our nation’s communications networks are facing rapidly evolving threats ranging from fraud and espionage to sabotage,” said Sen. Deb Fischer at a Senate Commerce Committee hearing on Tuesday.
In late 2024, U.S. officials became aware of a Chinese government cyberespionage operation targeting global telecommunications systems. That became known as the “Salt Typhoon” attack, the worst telecommunications compromise in the nation’s history.
What is Salt Typhoon
China’s Ministry of State Security exploited the U.S. government’s wiretapping system, giving the Chinese government access to every major U.S. telecom provider and virtually any phone on the system since at least 2019. According to the FCC, it was part of a “massive espionage campaign that has affected dozens of countries.” (See the FCC factsheet from December 2024: https://docs.fcc.gov/public/attachments/DOC-408015A1.pdf)
Today, U.S. senators say consumers and government officials using private phones are still at risk.
“The Chinese government’s espionage operation deeply penetrated networks of at least nine U.S. telecom companies, including AT&T and Verizon,” Sen. Maria Cantwell, ranking member of the Senate Commerce Committee, said on Tuesday. “They exploited the wiretapping system that our law enforcement agencies rely on under the Communications Assistance for Law Enforcement Act — known as CALEA. These systems became an open door for Chinese intelligence. Salt Typhoon allowed the Chinese operation to track millions of Americans’ locations in real time, record phone calls at will and read our text messages.”
U.S. Government Initial Response
In the wake of the news of the compromised telecommunications systems, the FCC passed a Declaratory Ruling in January 2025. The U.S. government also responded with limited sanctions against a person based in Shanghai and a Sichuan-based company involved in the Salt Typhoon hacking. (See: https://home.treasury.gov/news/press-releases/jy2792)
China hawks in the United States expected more.
Trade Truce First; No Sanctions China’s Spy Agency
Now, the Trump administration is quietly signaling it is taking a softer approach. The Financial Times reported on Wednesday the Trump’s Treasury Department is shelving plans to impose sanctions on China’s spy agency, the Ministry of State Security, related to the hacking. (See https://www.ft.com/content/61016803-baf5-4be5-8350-e0cc5ca4ab26) Furthermore, it won’t enact export controls on advanced artificial intelligence chips from Nvidia. The one-year trade truce U.S. and Chinese leaders reached in October comes first.
Regulators Repeal Rule
Regulators are also backing down. Last month, the FCC rescinded 128-page Declaratory Ruling on cybersecurity into effect January 15. That ruling called on telecommunications companies to limit the interception of communications to cases of lawful authorization. (See text of the ruling: https://docs.fcc.gov/public/attachments/FCC-25-9A1_Rcd.pdf)
On November 20, 2025, the FCC overturned that with a 2-1 vote. In its news release, the FCC said the agency has engaged with the industry, asking them to take “extensive, urgent, and coordinated efforts to mitigate operational risks, protect consumers, and preserve national security interests.” The news release said the industry providers committed to doing that.
The industry hailed the decision, saying it gives communications companies “the agility they need.” (See the U.S. Telecom Association release: https://ustelecom.org/joint-statement-on-fcc-rescinding-declaratory-ruling-on-calea/)
Democrats in Congress rebuked the decision, complaining that it replaces rules with a voluntary approach.
“In the aftermath of the worst telecommunications compromise in our nation’s history, today’s vote by the FCC walks back yet another effort to set meaningful, enforceable cybersecurity standards for America’s communications backbone, after congressional Republicans overturned cybersecurity rules set by the FCC in 2017,” said Sen. Mark Warner. “Congress, the administration, and the FCC should be moving toward greater transparency and stronger protections, not less.”
Meanwhile, the FCC Commissioner who voted against it, Anna Gomez, put out an even stronger statement against the voluntary, industry-led approach. (See statement: https://docs.fcc.gov/public/attachments/DOC-415409A1.pdf)
“Ten months into this Administration, this FCC has still not put forward a single actionable solution to address the growing cybersecurity threat to our communications networks. Not one concrete proposal. Not one protection standard. Not one accountability mechanism. Its proposed rollback is not a cybersecurity strategy. It is a hope and a dream that will leave Americans less protected than they were the day the Salt Typhoon breach was discovered,” said Commissioner Gomez. “By rescinding previous efforts to strengthen our networks and offering nothing in their place, the FCC leaves the country less secure at the very moment when these threats are increasing.”
