Welcome to Foreign Policy’s China Brief.

The highlights this week: The Trump administration’s group chat breach reflects how the United States could lose ground to China on cybersecurity, Beijing may stall purchases of Venezuelan oil as Trump threatens more tariffs, and China’s large language model development booms in the wake of DeepSeek’s debut.

Does Beijing Have the Cybersecurity Edge?

The accidental inclusion of Atlantic editor Jeffrey Goldberg in a Signal group chat of top U.S. officials discussing strikes against Iran-backed Houthi rebels in Yemen offers another sign that U.S. cybersecurity is at a low point.

U.S. cybersecurity weakness benefits Beijing, as Washington’s main opponent online, and it could give China a critical edge as it pursues targeted hacks against U.S. entities. Beijing has always had advantage in information warfare over Washington simply because the United States is an open society and China is a closed one.

No Chinese official would accidentally add a journalist to a group chat, not least because they wouldn’t have the journalist in their contact list. If they did, the journalist would be afraid to report the story. Chinese leaders steer clear of electronic communications about sensitive matters, fearing both U.S. spying and internal surveillance, and prefer in-person talks when possible.

But the so-called Signalgate episode goes beyond the necessary weaknesses of an open society. It’s not just adding Goldberg to the chat that is the problem—it’s that officials were discussing highly sensitive information on a third-party app and possibly on unsecured personal devices. (Signal, which is encrypted, is not banned on government devices, but it is frowned upon.)

The United States suffered critical intelligence losses in China a decade ago because the CIA underestimated China’s capabilities. Against a highly skilled peer opponent that routinely breaches foreign telecommunications, security failures such as Signalgate essentially hand China the ball and an open net.

After all, the “Houthi PC small group” might not be the only chat out there that is being held on third-party apps but should be confined to internal, heavily secured channels. The Trump administration is very leaky, including the president himself.

The Trump administration has also dismantled U.S. cybersecurity capacity, including cuts at key agencies and a seeming retreat from online conflict with Russia. Before President Donald Trump took office, the Chinese hacking operation known Salt Typhoon was causing panic in Washington, but the president quickly abolished the board that was investigating it—likely because he feels threatened by probes into disinformation and foreign influence.

U.S. intelligence services have not escaped the Trump administration’s assault on civil servants. Elon Musk’s Department of Government Efficiency has also compromised sensitive intelligence information and created numerous weaknesses for foreign intelligence collection to exploit. (The breaches to come might make the 2015 Office of Personnel Management hack look small.)

The Trump administration’s attacks on diversity, equity, and inclusion initiatives also threatens efforts to address discrimination against Chinese Americans in national security. Chinese Americans have a harder time getting security clearance and are often blocked from working on China. That is a problem because they are more likely than other candidates to have the language skills and cultural understanding that greatly help in intelligence analysis.

To be sure, China has its own challenges. Many Chinese citizens speak English and have spent time in the United States, but espionage paranoia means that having foreign contacts can easily get officials branded as untrustworthy. The close guarding of information also makes knowledge-sharing among different agencies difficult.

Yet all this counts for very little if the officials in charge of U.S. cybersecurity are blatantly and incompetently breaking the rules. China already had an edge; it might soon be in a different weight category than its main opponent.

What We’re Following

China weighs tariff response. On Monday, Trump threatened a 25 percent tariff on any country that buys Venezuelan oil, to be implemented on April 2. That will likely prompt a stall in purchases from China, one of Venezuela’s biggest oil importers.

As with many details of Trump’s ever-shifting tariff plan, it’s unclear whether the 25 percent levy would come on top of the existing tariffs on Chinese goods, but it seems likely. Trump has hinted at “flexibility” in dealing with China.

For the moment, China is largely keeping its powder dry—making limited responses and waiting to see how much pain U.S. consumers can suffer. Beijing has pushed back and is trying to ensure that big companies such as Walmart pass their increased costs on to U.S. shoppers rather than applying pressure on Chinese suppliers to absorb them.

Leishuei River crisis. The contamination of a river in China’s Hunan province with high levels of thallium, a heavy metal that is a byproduct of many industrial activities, is receiving an unusual amount of press coverage. The Leishuei River supplies water to more than 4 million people in the city of Chenzhou.

Such media attention usually means that a disaster has reached a scale that is impossible to cover up, signaling a brief round of claims that the event is under control before heavy censorship kicks in. The official emergency response came a week after the crisis was first noted on social media.

China’s water pollution is a serious problem, and thallium contamination in rivers has been a recurring issue. Environmental issues used to be a rare area where the government somewhat tolerated protest and activism, but that ended in the early years of Chinese President Xi Jinping’s rule.

FP’s Most Read This Week

• It’s Time for Ukraine to Accept an Ugly Peace by Graham Allison
• Is Trump Executing a Self-Coup? by Moises Naim
• The Horror Inside the Salvadoran Prisons Where Trump Is Sending Migrants by Noah Bullock

Tech and Business

Beijing’s AI boom. The sudden rush of large language model (LLM) development in China continues after artificial intelligence firm DeepSeek released an advanced model in January. New models appear seemingly every week. There seem to be two roads that China could go down—assuming that LLMs are a genuinely transformative technology and not another Silicon Valley bubble.

The first is the technique that China successfully used to develop internet giants such as Alibaba: letting champions emerge from intense market struggle and then taking a strong role in controlling the firms that win. The second (and less successful) technique involves the direct government control that has characterized China’s largely failed attempts at boosting chip manufacturing.

Beijing now seems to be taking the first approach, but as AI is talked up even more, the political leadership might feel that it needs to take a stronger hand in planning it, leading to a slowdown.

Crypto ripple effects. The United States has lifted sanctions against Tornado Cash, a firm that specialized in obscuring cryptocurrency transactions, making them even harder for authorities to trace. Crypto advocates have a powerful voice in the White House, but China is likely to see the move as aggressive—even if the Trump team was unaware of the geopolitical consequences.

First, people relied on cryptocurrency to evade China’s tight currency controls before Beijing enforced its ban on crypto mining and trading; one common technique was to pay for the energy costs of mining in Chinese yuan and then sell the mined bitcoin in U.S. dollars. China has a vested interest in tracing those transactions.

Second, Tornado Cash was used in so-called pig butchering scams orchestrated by online con artists who are largely based out of Southeast Asia and often rely on coerced labor. China and Thailand recently carried out another joint crackdown on organized crime syndicates that run such scams, and Beijing won’t be happy to see Washington hand a key tool back to gangsters.