The key issue of fentanyl will become central in future tariff negotiations between the USA and China
During the scheduled bilateral trade talks in Davos, Switzerland, on May 10-11, the entire global community’s attention will be focused on a genuine “hot” topic — the fight against the massive spread of fentanyl, a synthetic opioid that has caused one of the most severe drug crises in modern American history. These negotiations, taking place in a highly tense atmosphere, have the potential to determine the future course of relations between the two enormous economies, which are currently in a rather critical state, effectively on the brink of an economic “war,” and to forecast their future cooperation strategies. According to sources from The Wall Street Journal, one of the main Chinese officials joining the delegation in Switzerland will be Minister of Public Security Wang Xiaohui, whom official circles in Beijing consider a key figure in addressing this extremely urgent issue. He will work within the team led by Vice Premier He Lifeng, who is a trusted associate of President Xi Jinping and plays a significant role in implementing official policies to resolve the crisis. This suggests that the fight against fentanyl will occupy a central place in the negotiation process. This drug has become the catalyst for a broad crisis in the USA — from the surge in mortality rates caused by overdoses to significant social and economic repercussions. Leading the negotiations with their American counterparts will be U.S. Treasury Secretary Janet Yellen and Trade Representative Katherine Tai. They, along with their Chinese colleagues, will coordinate possible steps both in combating the production and export of fentanyl and in the realm of trade tariffs, which have long remained one of the most contentious issues in the bilateral trade discourse. Mutual mistrust and genuine disagreements in fighting drug trafficking considerably complicate progress in this area, making these negotiations especially crucial. On one hand, Chinese officials emphasize that they demonstrate good will in cooperation, stating their intentions to intensify efforts against transnational drug trafficking. On the other hand, they cautiously note that U.S. high tariffs, which also hinder progress, add to the strain in relations and reduce motivation for cooperation. “The presence of Wang, who is a close confidant of Xi Jinping, at these negotiations clearly demonstrates: fentanyl is not just a topic of discussion — it is a key element of all trade dynamics between the two global leaders at this stage,” remarks Yun Sun, Director of the China Program at the Stimson Center in Washington. According to her, Beijing’s level of openness to cooperation in this area will be a very important indicator of how willing China is to reach a compromise at this moment. A critically important factor is also how Beijing assesses the situation with trade tariffs, since past experiences do not exclude the possibility of a return to more stringent measures. For example, in recent months, the administration has already imposed tariffs of 145% on Chinese goods, while China responded with tariffs of 125% on American exports. However, during Donald Trump’s last speech, as the head of the administration during the trade war’s onset, he hinted that these tariffs might be reduced to around 80%, signaling a move toward de-escalation. Expressing a desire to lower trade barriers, Trump stated: “I am willing to cut tariffs to 80% — a level that still leaves many questions open but offers a chance for de-escalation.” This has generated significant interest and discussion among analysts, as reaching a compromise in such a complex area as trade policy is a highly delicate process. According to experts, the final agreed-upon tariff level during future negotiations may fluctuate around 34%. By accepting this tentative compromise figure, the U.S. administration aims to maintain the current dynamics in bilateral relations and to bolster efforts to find joint solutions to the problems that have recently intensified. Thus, fentanyl will continue to be one of the most complex and sensitive topics in trade talks between the USA and China. The future of trade depends heavily on both sides’ ability to overcome mistrust, reach compromises, and improve cooperation in combating drug trafficking. The negotiations in Switzerland will be decisive for shaping the course of the two economies, and their outcomes will determine how quickly and effectively solutions to this crisis can be found.