On Fentanyl, Biden Should Look to Work With China

On Fentanyl, Biden Should Look to Work With China

REUTERS/Alexandre Meneghini

The fentanyl epidemic is a major election issue. The U.S. could leverage trade policy with China to crack down on its export. 

April 1, 2024 11:28 am (EST)

REUTERS/Alexandre Meneghini
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In November, the American people will choose the forty-seventh president. The Pew Research Center has found that the country’s top priority for 2024 mirrors that of the preceding election year in 2020: the economy. However, a notable shift has emerged, with over half of Americans (55 percent) now prioritizing the issue of “reducing availability of illegal drugs.” This trend carries profound implications, especially in swing states where tackling the lethal fentanyl crisis has become a decisive factor in the forthcoming election. According to a recent Bloomberg / Morning Consult poll of 4956 registered voters across seven swing states, about 8 in 10 voters (77 percent) consider fentanyl misuse a “very important” or “somewhat important” issue in shaping their decisions this November. This surpasses the attention to other issues like abortion, climate change, labor and unions, or ongoing conflicts in Ukraine and Gaza.  

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Fentanyl has become a cross-cutting issue that offers President Joe Biden and former President Donald Trump an angle to discuss important aspects of America’s economic security, everything from immigration and border security to crime and China. However, to combat the supply side of America’s deadliest drug overdose crisis, the next U.S. president will have to find a way to work with, rather than blame, China.  

China’s role in the flow of fentanyl 

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Fentanyl sold on America’s streets does not primarily come from China. Since 2019, the supply of fentanyl from China directly to the United States has “decreased substantially,” as noted in the 2020 U.S. National Drug Threat Assessment. However, chemicals used to synthesize and produce fentanyl (known as fentanyl precursors or pre-precursors) in Mexico and other Central American countries have continued to originate from China, as reported in the 2023 International Narcotics Control Strategy Report published by the U.S. Department of State.  

Nearly all U.S. government enforcement actions related to fentanyl and taken against Chinese persons have involved their manufacture of chemical precursors. Last June, the U.S. Department of Justice indicted four Chinese chemical companies and eight executives for knowingly supplying precursor chemicals for illicit fentanyl production in Mexico. In October, the U.S. Treasury sanctioned twenty-eight members of a Chinese smuggling network that had been supplying Mexican drug cartels with chemical precursors for years. In both cases, the companies involved were private small operations with ten to fifty employees located in provinces known for constructing some of China’s largest chemical industrial parks—Anhui, Hebei, Henan, Hubei, Fujian, and Jiangsu.  

China is the world’s top exporter of active pharmaceutical ingredients (API). China’s comparative advantage is most significant in low-value APIs, where raw materials comprise most of the cost and polluting factors. Small-scale producers form the backbone of the API industry in China. API manufacturers require a pharmaceutical license and receive some scrutiny, but with more than 1,600 producers spread across every province except Tibet, it is difficult for the government to enforce compliance. Additionally, more than 160,000 small Chinese businesses manufactured chemicals with relatively little government oversight in 2022. Intense competition among small-scale producers operating on thin profit margins will likely continue to drive some firms to opportunistically sell chemical precursors for synthetic drugs such as fentanyl and methamphetamine to whomever in the world may demand them, for whatever purpose.  

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The money-and-payment side of the illicit drug trade has also drawn China in. China’s small chemical manufacturers make it easy for foreign buyers to place orders and make payments using messaging apps such as WeChat that support instant payments. The buyer only needs to verify their identity when opening a WeChat account, a step that can be easily circumvented. Moreover, cartels in the United States, Mexico, and Canada are increasingly partnering with specialized Chinese criminal gangs to launder their money. Gangs offer money-laundering services that are faster, cheaper, and safer, using Chinese enterprises as cover to move large sums of money, taking advantage of the advanced real-time settlement capabilities of China’s banking system and avoiding detection by U.S. authorities.  

The U.S. government can and should strike a deal to limit China’s fentanyl exports  

Washington and Beijing often trade heated words on the subject, but both sides share an interest in stopping the illegal fentanyl trade. The harm to China’s international image by its association with the fentanyl crisis vastly outweighs whatever profits accrue to its chemical manufacturing industry. U.S. law enforcement agencies need the cooperation of local government officials and police in China to curb the supply of chemical precursors to drug cartels that operate with impunity in Mexico. Neither government benefits from tolerating international money-laundering activity associated with drug trafficking because it also enables corruption among officials.    

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The U.S. and Chinese governments have the infrastructure and tools in place to work together to deal a severe blow to the illicit fentanyl trade. The two governments have a history of anti-drug cooperation stretching back to 1985, offering a platform for them to continue building on. In 2010, U.S. Customs and Border Patrol (CBP) signed a memorandum of understanding with China’s Customs Agency, establishing a cooperative security relationship. Since 2019, CBP has regularly shared targeting information with China’s Ministry of Public Security. In 2017, U.S. and Chinese authorities conducted a joint investigation into online sales of fentanyl shipping through international mail. The arrests of three persons in the United States yielded intelligence that was shared with Chinese authorities and led to the arrest of nine more persons in China, two of whom received effective life sentences.  

Washington also needs to recognize the disparity in urgency regarding fentanyl with Beijing: while China views it as a problem to be resolved in due time, the United States views it as a crisis demanding immediate action. The inaugural U.S.-PRC Counternarcotics Working Group Meeting this January showed a mutual willingness to engage in substantive discussions for practical solutions. Nevertheless, Washington cannot rely solely on diplomatic pleas to prompt Beijing’s reassessment of priorities; concessions in other areas important to Beijing will have to be on the table. Potential incremental steps in China’s top priorities that do not undermine U.S. national security warrant consideration, such as extending the duration for Chinese firms to remain on the Commerce Department’s Unverified List before moving to the more stringent Entities List. Implementing more flexible export end-use checks for Chinese companies and individuals is also worth exploring. Strengthening anti–money laundering cooperation with China will be imperative for curtailing the illicit money flow associated with the drug trade. In reciprocity, China could update its list of controlled precursor chemicals to match the list contained in the UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. 

The price of winning China’s cooperation in combating the United States’ fentanyl crisis pales in comparison to the terrible price already paid by the American people, who have endured a fatal public health crisis over the last decade.  

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