Xi must stop fentanyl flow before tariff talks, Trump ally says

An American senator said China must halt the flow of fentanyl ingredients into the U.S. before any trade negotiations, a demand that clouds the prospect of imminent leaders’ talks to ease tensions between the world’s two largest economies.

Steve Daines, a close ally of President Donald Trump, laid out the condition in meetings with Chinese officials in Beijing over the weekend. The Republican lawmaker said he hopes a leadership meeting will take place before the end of the year, although Trump previously said it would happen soon.

“It’ll be difficult to have any conversation about tariffs and non-tariff barriers until the fentanyl precursor issue is resolved,” Daines said in a telephone interview with Bloomberg News on Sunday. 

The Montana senator, who was an intermediary for Trump during his first trade war with China, met with Chinese leaders including Premier Li Qiang over the weekend. He didn’t meet with President Xi Jinping, who in 2023 sat down with then-Senate Majority Leader Chuck Schumer, who led a bipartisan delegation to Beijing, and California Governor Gavin Newsom on separate occasions.

While he called his conversation with Li constructive, Daines emphasized a request that Beijing may find hard to fulfill just days before fresh U.S. trade actions.

“I made it clear that President Trump needs to see China take decisive actions to stop the flow of fentanyl precursors, not to slow down the flow but to stop the flow,” Daines said.

That contrasts with China’s claim that it has already forcefully cracked down on the fentanyl trade. Beijing said earlier this month that it had done all it can for the U.S. and Washington should have said a “big thank you” instead of slapping levies on Chinese imports.

“The calendar is working against a meeting,” said Dexter Roberts, a nonresident senior fellow at the Atlantic Council Global China Hub and instructor in Chinese politics at the University of Montana. “As tariffs ratchet up on both sides, the likelihood of a Xi-Trump meeting only fades.”

Communist Party officials met with Daines and global CEOs days before an April 1 deadline for a U.S. review of Beijing’s trade compliance and Trump’s plans to impose reciprocal duties globally the day after.

China is likely to retaliate against any new trade curbs from the US, as it did after Trump imposed a new 10% tariff on Chinese goods in February and added another 10% in March. China struck back with levies on a slew of U.S. farm products and suspended soybean imports from three US entities.

Xi visit

The U.S. president has repeatedly signaled a willingness to meet Xi, saying last week that the Chinese leader will visit Washington in the “not too distant future,” though Beijing responded by saying it had “no information” to share.

U.S. Secretary of State Marco Rubio later poured cold water on the idea of an imminent Xi-Trump meeting, saying it would require a reason and none was scheduled.

“There’s a desire from both sides to have the high-level meeting. There’s just isn’t a date yet,” Daines said. 

Wu Xinbo, director at Fudan University’s Center for American Studies in Shanghai, said Daines’ visit is a positive step for bilateral ties even if a Xi-Trump sitdown isn’t on the horizon.

“The urgent thing is that the two sides should start to talk and negotiate in the next one week or two, so that we can avoid further escalation of tensions in early April,” Wu said. “The summit will be the outcome of the process rather than the beginning of the process.”

Chinese officials have said the U.S. hasn’t outlined detailed steps expected to remedy its role in the illegal fentanyl trade, which Trump cited as the reason for tariffs. Trump’s team rejected that assertion, saying they expect the People’s Daily newspaper to run a front-page article condemning the fentanyl trade and Beijing to hand the death penalty to smugglers.

CEO huddle

Li said during his meeting with Daines on Sunday that no country’s development and prosperity can be achieved by imposing tariffs, but only by opening up and cooperation, according to the official Xinhua News Agency. Li reiterated that there is no winner in a trade war, and said that he hoped the U.S. and China can communicate frankly, build trust and deepen practical cooperation.

Daines, who worked in China and Hong Kong in the 1990s as an executive for Procter & Gamble Co., was joined in his meeting with the Chinese No. 2 by top U.S. executives visiting Beijing for the annual China Development Forum. They included FedEx Corp. CEO Raj Subramaniam and Boeing Co. Senior Vice President Brendan Nelson, along with top officials from Cargill Inc., Pfizer Inc. and Qualcomm Inc.

China’s Vice Premier He Lifeng met on Sunday with heads of multinational corporations including Apple Inc., Brookfield Corp, Medtronic Plc, Mastercard Inc., Eli Lilly & Co, and Corning Inc., according to a statement. The Chinese official said his country welcomes the company to expand investment and vowed to improve the business environment.

In addition to fentanyl, Daines said he also raised the issue of expired export licenses for U.S. beef producers that require renewal. 

Daines also said he’d like to arrange a bipartisan delegation of U.S. senators to China later this year after David Perdue is confirmed as ambassador to the country. Perdue once worked in Singapore and Hong Kong helping American firms source cheap labor in Asian countries before switching to politics.

This story was originally featured on Fortune.com