China and U.S. Tackle Fentanyl Crisis Amidst Trade Tensions

The ongoing fentanyl crisis in the United States, which has resulted in tens of thousands of overdose deaths each year, remains a contentious issue between the U.S. and China. While the U.S. has accused China of contributing to the crisis by being a major producer of fentanyl precursors, China has taken steps to address these concerns. Recently, the Chinese government released a white paper detailing its efforts to curb the production and export of these precursors. However, this issue is further complicated by the broader trade tensions between the two countries.

In response to China's alleged role in the fentanyl crisis, the U.S. has imposed significant tariffs on Chinese goods. The average effective U.S. tariff rate on Chinese imports is set to increase to 33%, a notable rise from around 13% prior to President Donald Trump's latest term. These tariffs are expected to impact China's GDP growth by 0.6 percentage points, according to Allianz estimates. Despite these economic measures, both nations had previously identified fentanyl as an area for potential cooperation under the Biden administration.

The relationship between the U.S. and China is further strained by China's recent decision to tighten restrictions on exports of critical minerals needed by the U.S., and the addition of several U.S. companies to lists that limit their ability to do business with China. These actions come as part of China's countermeasures to the U.S. tariffs, which were described as "legitimate actions" by a Ministry of Foreign Affairs official.

The U.S. trade deficit with China has narrowed over recent years, decreasing to $295.4 billion in 2024 from $346.83 billion in 2016. This reduction comes amidst a backdrop of increasing tariffs and trade negotiations, including a "Phase One" trade agreement reached shortly before the Covid-19 pandemic, which required Beijing to increase its purchases of U.S. goods.

An official from the Chinese Ministry of Foreign Affairs acknowledged that while China would endeavor to address U.S. concerns regarding the illicit fentanyl trade, additional U.S. tariffs related to the drug issue would be "a different thing."

"a different thing" – an official from the Chinese Ministry of Foreign Affairs