U.S. and China Signal Potential Trade Breakthroughs Amid Ongoing Tensions
WASHINGTON – The United States and China are exploring potential agreements to address trade friction surrounding fentanyl precursor chemicals, rare earth elements, and agricultural tariffs, according to statements made Sunday and recent reports. While basic economic disagreements remain, initial discussions have yielded commitments from China to curb the flow of chemicals used in fentanyl production, raising the possibility of reduced U.S. tariffs.
In February, former President Trump imposed a 10% tariff on Chinese imports, later doubled, to pressure Beijing to halt the export of fentanyl-related chemicals. For months, China has sought a resolution to these tariffs, expressing frustration over a lack of progress in negotiations.A senior Chinese public security official previously attended trade talks without a corresponding U.S. representative.
Chinese officials have also pointed to steps taken during the last year of the Biden administration to combat drug trafficking, arguing these efforts haven’t been acknowledged by the Trump administration. They have further expressed confusion regarding specific U.S. demands. In response, China levied tariffs of 10% or 15% on U.S. farm goods, including soybeans.
According to a statement by a U.S. official,recent discussions with China have resulted in preliminary agreements to restrict the export of precursor chemicals,fueling optimism that the U.S. may consider reducing the fentanyl tariffs.
Despite these potential breakthroughs, important challenges persist. China is attempting to revitalize it’s economy, hampered by a housing market downturn, by increasing factory output and exporting low-priced goods. The U.S. and other developed nations are determined to prevent this overcapacity from undermining their own industrial bases.
“we can’t decouple,” stated a U.S. expert. “There are things that we both need from each other… If you continue trying to damage the other side with no end in sight,then both sides die the death of a thousand cuts.” The expert suggested a strategy of ”tactically trying to remove friction – basically slapping on band aids without ever curing the disease.”
The U.S. official, Bessent, stated Sunday that “there have been no, no changes in our export controls.”