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Trump Makes Xi an Offer He Can't Refuse: Cut the Supply of Fentanyl Precursors or Else

AP Photo/Andy Wong, File

If you're read Ed's post on the tariff news, you already know that President-elect Trump is using tariffs or the threat of tariffs to create some change even before he takes office. When it comes to China, Trump announced a 10% tariff on Chinese goods which he specifically tied to the ongoing fentanyl crisis. Most of the fentanyl killing Americans comes from cartels in Mexico but the precursor chemicals used to produce it are sold to the cartels by China. Both Trump and Biden have asked China to stop the sale of these precursor chemicals but so far we've been ignored.

It reads:

I have had many talks with China about the massive amounts of drugs, in particular Fentanyl, being sent into the United States – But to no avail. Representatives of China told me that they would institute their maximum penalty, that of death, for any drug dealers caught doing this but, unfortunately, they never followed through, and drugs are pouring into our Country, mostly through Mexico, at levels never seen before. Until such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America. Thank you for your attention to this matter.

This strikes me as a genuinely smart approach to this problem. The number of American deaths caused by fentanyl is the highest it has ever been. President Biden talked to Xi Jinping about cutting the supply of precursor chemicals last year and once again it seems nothing has changed. In fact, despite all of China's promises, a congressional report published this April said that the Chinese government is still subsidizing the export of these chemicals.

China is fueling the fentanyl crisis in the U.S. by directly subsidizing the manufacturing of materials that are used by traffickers to make the drug outside the country, according to a report released Tuesday by a special House committee focused on countering the Chinese government.

Committee investigators said they accessed a government website that revealed tax rebates for the production of specific fentanyl precursors as well as other synthetic drugs as long as those companies sell them outside of China.

“Through its actions, as our report has revealed, the Chinese Communist Party is telling us that it wants more fentanyl entering our country,” said Rep. Mike Gallagher, the Republican chairman of the special House committee. “It wants the chaos and devastation that has resulted from the epidemic.”

On top of that, Chinese individuals also help the cartels launder their blood money.

It’s one of the biggest busts yet as federal agencies step up efforts to target the highest levels of Chinese money laundering rings that experts and officials tell CNN are the go-to partners for Mexico’s most dangerous drug cartels that traffic fentanyl, cocaine and methamphetamine into the US...

The criminal network allegedly includes an array of Chinese, Mexican and American men who allegedly worked as couriers, money brokers and traffickers in an elaborate scheme to pick up big amounts of cash from the sale of cocaine and methamphetamine in the Los Angeles area and launder the money for the Sinaloa Cartel. Ten thousand fake fentanyl pills were also seized in the operation, according to the DEA...

“In almost every investigation we have that involves the cartels and money laundering, the Chinese (groups) are involved,” the DEA official said in an interview conducted on the condition that the official not be named...

“It’s a marriage made in heaven,” Don Im, who spent three decades at the DEA tracking money laundering and other crimes, told CNN. “The world’s global drug markets have now become China’s ad-hoc bank.”

Needless to say, this has gone on for too long. Now that China's economy is struggling we have some real leverage. President-elect Trump just made Xi Jinping an offer he can't refuse: Cut off the fentanyl precursors or see your economy suffer. As of this morning, China is shrugging this off. They still want to pretend they are the good guys here, not the bad guys.

China’s foreign ministry said on Tuesday that fentanyl was the US’ own problem and that China, which it said was one of the countries with the strictest and most thorough drug control policies in the world, had provided support “out of a humanitarian spirit”.

“China has carried out with the American side extensive and in-depth anti-drug cooperation and … achieved remarkable results, which is evident,” it said.

“China is willing to continue anti-drug cooperation with the United States on the basis of equality, mutual benefit and mutual respect. The United States should cherish the goodwill of the Chinese side and maintain the hard-won good situation of anti-drug cooperation between China and the United States.”

It sounds to me like they are daring Trump to follow through and maybe even making a subtle threat that things could be a lot worse. Fortunately, I don't think Trump is going to fall for any of that. 

Over at the NY TImes, they have an article up predicting this effort will fail.

“An imposition of tariffs is not going to do anything regarding the flow of fentanyl,” said Vanda Felbab-Brown, a senior fellow at the Brookings Institution and an expert on global drug policy. “In fact, it might undermine the counternarcotics cooperation that the U.S. and China have been doing in 2024 and that came after no cooperation for over two years.”

Chinese officials have tended to use the fentanyl issue as leverage over the United States, cooperating only when they receive something in return.

To restart talks on narcotics after Mr. Biden and Mr. Xi met in California, Washington agreed to Beijing’s demand that U.S. sanctions be lifted on a forensics institute run by China’s Ministry of Public Security. 

So China has been using fentanyl to twist our arm on sanctions but the same experts don't think the US can twist back the other way. China runs a police state that can weld people inside their apartment buildings if it decides that's what's good for them. They can certainly stop the flow of fentanyl precursors if they are properly motivated to do so.

Politically, this seems like a smart move because tariffs will inevitably have an impact on our economy as well. By tying these tariffs to the fentanyl crisis, Trump has made this more than a dispute about trade balances. This is now a righteous cause. If it costs consumers something, it does so for a reason that is pretty hard to argue with.

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