U.S. Weighs Potential Deal With China on Fentanyl

The Biden administration is discussing lifting sanctions on a Chinese police forensics institute suspected of participating in human-rights abuses, people familiar with the matter said, in a bid to secure Beijing’s renewed cooperation in fighting the fentanyl crisis.

Secretary of State Antony Blinken during meetings in Beijing last month proposed setting up a new working group with China to try to resuscitate stalled talks on combating fentanyl. Chinese officials, however, stuck to their long-held position that the U.S. must first remove the sanctions on the police institute as a precondition for restarting joint counternarcotics work, the people familiar said.

Stopping the flow of fentanyl into the U.S. is a Biden administration priority, with the opioid scourge unleashing a wave of deaths across America. U.S. officials see China as having a critical role in that effort. Chinese companies produce chemicals, known as precursors, that are shipped to cartels in Mexico, which use them to produce fentanyl and smuggle it into the U.S.

Given the stakes, the U.S. is trying to figure out how to elicit China’s cooperation and the police institute has become a hurdle.

The working group was supposed to be part of a phased approach to break the impasse, the people said. Within that channel, the people said, China was expected to lay out its plans to work with the U.S. on the drug fight, while the U.S. would reconsider its restrictions on the institute.

Chinese officials “haven’t agreed to anything yet, and we are a little stalled on where to go,” one of the people familiar said.

The White House and State Department declined to comment on the internal deliberations. A State Department spokesman said that Blinken while in Beijing never offered to remove the sanctions on the Chinese police institute.

“No member of the U.S. delegation offered to lift any sanctions on PRC entities or said we would consider doing so,” the spokesman, Matthew Miller, said, using an acronym for the People’s Republic of China. “The Secretary discussed a working group on fentanyl that would allow each side to raise and discuss their concerns, and we continue to call on the PRC to stop the flow of fentanyl precursor chemicals from China to the cartels.”

Amid the wide-ranging, divisive strains in U.S.-China relations, fentanyl was an issue, along with climate change, that the Biden administration identified as an area of potential for cooperation with Beijing. The inability to move ahead shows the level of distrust between the two powers, despite the Blinken trip and several other high-level meetings intended to improve relations.

The Chinese Ministry of Public Security’s Institute of Forensic Science had its access to U.S. technology strictly limited three years ago for what the Trump administration said was its role in a campaign of mass surveillance and widespread human-rights abuses against ethnic Uyghurs and other minority groups in China’s far western Xinjiang region. China denies the allegations of abuses in Xinjiang, and has told the U.S. that the sanctions are also undermining its ability to access U.S. equipment for counternarcotics work.

Chinese officials have been firm with the U.S. for months that removing the police institute from the export blacklist is a precondition for restarting joint work to combat drugs, the people said. China froze counternarcotics cooperation with the U.S. nearly a year ago in protest of then-House Speaker Nancy Pelosi’s visit to Taiwan, which China viewed as a provocation.

Deliberations inside the Biden administration have been under way since at least late last year as it seeks to show progress on fighting the opioid scourge, according to one of these people and a document seen by The Wall Street Journal. They mark a significant—and potentially politically fraught—bid to jump-start cooperation with China.

China maintains the U.S. is seeking to deflect blame for the crisis and that Washington hasn’t done enough to control prescription drugs, choke off domestic demand for illegal ones and raise public awareness of the issue. More than 100,000 people died of drug overdoses in the U.S. in 2022, according to a federal estimate released in May, roughly in line with 2021 levels but significantly above those just a few years earlier.

The people familiar with the sensitive discussions cautioned that the U.S. was unlikely to remove the Chinese police institute from the export blacklist soon, and that much would still depend on what steps Beijing takes next and further talks by both sides.

Still, the Biden administration’s consideration of the issue marks a potential U.S. concession to China in an attempt to make progress on one of the president’s domestic priorities. Any move to lift export restrictions on a Chinese government agency deemed to have participated in suspected widespread human-rights abuses in Xinjiang risks a backlash in Washington.

The Biden administration is under pressure from Congress to deal with the fentanyl crisis, with some lawmakers urging the U.S. military be enlisted to smash the cartels.

Blinken raised the fentanyl issue explicitly with Foreign Minister Qin Gang in Beijing, one of the people said, during the visit in which he also met with China’s top foreign-policy official, Wang Yi.

“We agreed to explore setting up a working group or joint effort so that we can shut off the flow of precursor chemicals,” he told reporters.

Asked about the forensics institute, China’s Foreign Ministry didn’t comment directly on recent discussions with the U.S. But it reiterated its calls for Washington to lift the sanctions.

“If the U.S. genuinely wants to resolve its domestic drug problem, then it should respect the facts, withdraw the sanctions, and stop smearing and scapegoating,” the Foreign Ministry said.

Another person familiar with the discussions said the U.S. was looking for signs that Beijing will take a harder line on companies suspected of being involved in the fentanyl trade over the next few months, such as potentially cracking down on online vendors of precursors.

Chinese officials say the institute’s blacklisting has had an impact on China’s ability to fight drug trafficking. The forensics institute and China’s National Narcotics Laboratory are located at the same address. Because of that, Chinese officials have told their U.S. counterparts that the narcotics lab is also struggling to get access to the equipment it needs to do its work, according to the people familiar with the discussions.

China has specifically told the U.S. that sanctions are hindering it from importing equipment from American companies, according to one of the people.

Before Pelosi’s visit to Taiwan, the U.S. had seen some success in getting China to work with it on counternarcotics. In 2019, Beijing announced it was strictly controlling the entire class of fentanyl-related drugs, in response to pressure by the Trump administration.

China frequently cites this action as a show of goodwill toward the U.S. Since then, Washington has only further ramped up pressure on China on a range of issues, elevating hostilities between the countries.

One issue that could still derail efforts to rekindle counternarcotics cooperation is stepped-up U.S. legal efforts against Chinese nationals who prosecutors allege are involved in the fentanyl precursor trade. Last month, the U.S. Justice Department said two Chinese nationals had been expelled from Fiji and arrested by the Drug Enforcement Administration for their suspected role in one such precursor operation.

Beijing has sharply criticized the move. A Chinese Foreign Ministry spokesperson called it a form of arbitrary detention by the U.S. and it made a formal diplomatic complaint with the U.S.

Write to Brian Spegele at [email protected] and Charles Hutzler at [email protected]