China is looking into reducing fentanyl-related chemical exports as a possible way to restart the US trade talks that have stalled under US President Trump.
According to persons familiar with the situation, Beijing is considering making concessions on the export of chemicals used to make fentanyl in an effort to defuse tensions with the Trump administration and pave the way for new trade talks, the Wall Street Journal said.
Recently, Wang Xiaohong, the minister of public security and senior security official under Chinese leader Xi Jinping, has been asking what specific steps the Trump administration would want to see taken to address China’s involvement in the global fentanyl supply chain. It is well known that Chinese businesses make and export precursor chemicals that drug traffickers utilize, particularly in Mexico, to create the lethal opioid that is causing a public health emergency in the United States.
Beijing has not yet reached a conclusion, and talks are still going on. To show goodwill and pave the way for more extensive discussions, Chinese authorities are allegedly considering sending Wang to meet directly with top Trump officials, either in Washington or in a third nation.
Fentanyl as a “icebreaker” in diplomacy
According to Yun Sun, head of the Stimson Center’s China program, “fentanyl can be the icebreaker for the two countries to start with a more positive tone.” “Both parties are keen to begin negotiations.”
The change coincides with growing economic pressure in China, where deflation, a protracted real estate crisis, and declining consumer demand are posing significant challenges. A faltering Chinese economy has been further strained by the ongoing trade war with the US, which was brought on by President Trump’s aggressive tariff policy.
China’s Commerce Ministry announced on Friday that it is “currently evaluating” US statements indicating a readiness to talk on tariffs, marking a significant shift in tone after months of rejecting US overtures. This is the first indication that Beijing might be willing to change its earlier demand that Washington lower its tariffs before the start of formal negotiations.
Trump’s fight on tariffs and possible detour
Early in his second term, President Trump placed 20% tariffs on Chinese imports, claiming that China was complicit in the fentanyl crisis, which kills tens of thousands of Americans every year. At the time, Beijing rejected the rationale as a political front for a larger economic assault.
Since then, China has responded with 125% taxes of its own, while the US has increased tariffs on the majority of Chinese goods to 145%. As a result, bilateral commerce fell precipitously, US inflation increased, and China’s recession risk increased.
The Trump administration is allegedly exploring targeted tariff relief in response to retailer and manufacturer criticism, but it has made it clear that it expects China to take specific actions—like reducing exports tied to fentanyl—before easing its position.
Carve-outs reveal weaknesses
Both nations have already started to selectively exempt certain imports from the worst tariffs, even though no complete agreement has been reached. China has taken nearly $46 billion in US imports, mostly high-tech equipment, off its list of retaliatory actions, while the US has exempted roughly $102 billion worth of Chinese goods, notably consumer electronics, according to RAND analyst Gerard DiPippo.
DiPippo stated that the concessions made thus far seem to be more focused on economic self-preservation than on diplomatic compromise, adding that “by doing the exemptions, both sides have revealed to each other what their vulnerabilities are.”
From dialogue to deadlock?
The two capitals were unable to communicate for a large portion of this year. Chinese officials privately expressed dissatisfaction about their inability to reach Trump’s top aides. The roles now seem to be inverted: US officials have made public statements in recent days about contacting Beijing but have so far only received denials.
Fentanyl may offer the long-awaited opportunity for a de-escalation of the trade war, as Beijing has indicated a desire in addressing at least one area of conflict, and the Trump administration is looking for political victories ahead of a contentious election season.
Any progress, however, will rely on whether or not Beijing’s offer is accepted as sincere and whether Trump is prepared to reduce tariffs, which have grown to be a pillar of his “America First” economic strategy.
