Targeting Fentanyl: Analyzing the President’s Tariff Threat Against China

The White House has issued an Executive Order imposing tariffs on all goods imported from the People’s Republic of China (PRC), citing concerns about the supply chain of synthetic opioids, primarily fentanyl. This action aims to pressure the Chinese government to take stronger action to prevent the export of precursor chemicals used in the production of these deadly drugs. This analysis will examine the key provisions of this Presidential Action, its potential impact, and the political ramifications of this decision.

This Executive Order, titled “Imposing Duties to Address the Synthetic Opioid Supply Chain in the People’s Republic of China,” declares a national emergency and imposes a 10% ad valorem tariff on all goods imported from the PRC, effective February 4, 2025. The stated rationale is the failure of the PRC government to adequately stem the flow of fentanyl and related precursor chemicals into the United States, which the President argues is actively sustained and expanded by the CCP. The order expands the scope of a previous national emergency declaration (Proclamation 10886) and invokes the International Emergency Economic Powers Act (IEEPA) and the National Emergencies Act (NEA) as legal authority. The tariffs will remain in effect until the President determines that the PRC has taken “adequate steps” to alleviate the crisis. The Secretary of Homeland Security is tasked with determining modifications to the Harmonized Tariff Schedule (HTSUS) and consulting with other officials regarding China’s actions. As in the similar EO regarding Mexican tariffs, this one also provides that if China retaliates, the US may increase the tariffs or expand their scope.

The Executive Order is rooted in the ongoing opioid crisis in the United States, particularly the role of fentanyl as a leading cause of overdose deaths. It reflects the administration’s frustration with the perceived lack of cooperation from the PRC government in addressing the supply of precursor chemicals. The action builds upon previous efforts to pressure China to take stronger enforcement measures, including diplomatic pressure and sanctions. The President states he took steps to end the direct flow of fentanyl during his first term and that the CCP has since incentivized PRC chemical companies to export fentanyl and related precursor chemicals. The declaration of a national emergency provides the legal basis for invoking IEEPA and imposing tariffs. Like the Mexican Tariff, this is not the first time the President has used trade as a lever to encourage policy changes.

The Executive Order contains several key directives:

• 10% Tariff on All Chinese Goods: A 10% ad valorem duty is imposed on all articles that are products of the PRC, effective February 4, 2025.
• National Emergency Declaration: The existing national emergency declared in Proclamation 10886 is expanded to cover the PRC’s alleged failure to address precursor chemical suppliers, money launderers, and other transnational criminal organizations (TCOs).
• Secretary of Homeland Security Authority: The Secretary of Homeland Security is responsible for determining the necessary modifications to the HTSUS, consulting with other officials, and informing the President of China’s actions.
• Tariff Removal Contingency: The tariffs will be removed upon the President’s determination that the PRC has taken “adequate steps” to alleviate the opioid crisis.
• Retaliation Clause: Should the PRC retaliate, the President may increase or expand the tariffs.
• Limited Drawback: No drawback will be available with respect to the duties imposed pursuant to this order.
• Limited “De Minimis” Treatment: Duty-free de minimis treatment under 19 U.S.C. 1321 shall not be available for the articles described in subsection (a) of this section.

Potential Impact

• U.S. Consumers: The tariffs will likely lead to higher prices for U.S. consumers on a wide range of goods imported from China, including electronics, clothing, and household items.
• U.S. Businesses: Businesses that rely on Chinese imports for their supply chains will face increased costs, potentially leading to reduced profits, job losses, and relocation of production.
• Chinese Economy: The tariffs will significantly harm the Chinese economy, potentially leading to reduced exports, job losses, and economic instability.
• U.S.-China Relations: The action will severely strain relations between the United States and China, potentially undermining cooperation on other important issues, such as trade, security, and climate change.
• Opioid Crisis: The tariffs could potentially disrupt the supply chain of fentanyl and related precursor chemicals, but they could also lead to unintended consequences, such as the development of new synthetic opioids or the shift of production to other countries.
• Global Trade: The tariffs could further escalate trade tensions between the United States and China, potentially leading to a global trade war.

Legal/Constitutional Considerations

The President’s authority to impose tariffs under IEEPA and the NEA is subject to legal challenge. Opponents may argue that the national emergency declaration is pretextual, lacking a genuine national security threat. They could also argue that the tariffs exceed the President’s authority under IEEPA or violate international trade agreements. The broad scope of the tariffs, applying to all goods from China, could also raise legal concerns.

Political Implications

• Republican Support: Some Republicans will likely support the Executive Order as a strong stance against China and a commitment to addressing the opioid crisis. However, others may express concern about the economic consequences and the potential impact on relations with China.
• Democratic Opposition: Democrats will likely criticize the Executive Order as reckless, harmful to the economy, and damaging to U.S.-China relations.
• Business Groups: Business groups will strongly oppose the tariffs, warning of higher prices, job losses, and supply chain disruptions.
• Drug Policy Advocacy Groups: Drug policy advocacy groups will have mixed reactions, with some supporting efforts to disrupt the supply chain of fentanyl and others arguing that the focus should be on treatment and prevention.
• Presidential Approval: The Executive Order could appeal to voters who are concerned about the opioid crisis and believe that China is not doing enough to address the problem. However, it could alienate voters who are worried about the economic consequences and the impact on relations with China.

Comparison to Previous Actions

This Executive Order is reminiscent of trade actions taken by the Trump administration, including tariffs imposed on China during the trade war. Similar to those actions, it relies on national security justifications and unilateral measures.

White House Rationale

The White House rationale, as articulated in the Executive Order, is that the PRC government has failed to adequately stem the flow of fentanyl and related precursor chemicals into the United States, necessitating decisive action to protect U.S. national security and public health. The President emphasizes that the PRC has the capacity to blunt the global illicit opioid epidemic but is unwilling to do so.

Alternative Perspectives

Critics argue that tariffs are an ineffective and harmful tool for addressing the opioid crisis. They contend that tariffs will hurt U.S. consumers and businesses, damage U.S.-China relations, and potentially lead to unintended consequences, such as the shift of production to other countries or the development of new synthetic opioids. Some argue that a more effective approach would involve enhanced cooperation with China on law enforcement and intelligence sharing, as well as addressing the root causes of addiction in the United States.

The Executive Order imposing tariffs on Chinese goods represents a significant escalation in the U.S. approach to addressing the opioid crisis. It carries significant risks for the U.S. economy, U.S.-China relations, and global trade. The most important questions that remain unanswered include: Will China take the steps necessary to satisfy the President’s demands? What will be the economic impact of the tariffs on U.S. consumers and businesses? And how will the international community respond to this unilateral action? Only time will tell whether this action will achieve its intended goals or lead to unintended and negative consequences.