The Case for a Second Front in the War on Fentanyl

It is time for a maximum pressure campaign targeting the Chinese entities fueling America’s fentanyl epidemic.

On October 6, the Treasury Department announced a new round of sanctions on a Mexican fentanyl network supporting the Sinaloa Cartel. This economic strike against providers of fentanyl is an important part of the Trump administration’s growing pressure on Mexican drug cartels, which has already targeted cartel-associated banks in Mexico and alleged traffickers in the southern Caribbean. While significant, these sanctions will do little to stem the flow of drugs and stop the flood of deaths on their own. To make real progress, the administration must open a second front in the war on fentanyl: China.

In November 2023, the United States removed sanctions against a Chinese government institute complicit in human rights violations against Uyghurs in the Xinjiang region. It was a good-faith gesture, based on a commitment by Chinese leader Xi Jinping to take meaningful steps to address China’s role in the fentanyl crisis. However, President Xi has broken that commitment, doing next to nothing while claiming that fentanyl is “America’s problem.”

The second front on fentanyl needs to start by following the money — specifically, the role of Chinese gangs in cleaning cartel cash. Chinese gangs have largely taken over money laundering for the Mexican cartels by solving two problems at once. First, Chinese nationals living in America have a huge need for dollars. Chinese nationals can earn unlimited amounts overseas but by law can only take $50,000 of their Chinese savings out of the country. Second, the street sale of fentanyl generates billions of dollars in cash in need of laundering.

Chinese gangs are the perfect matchmaker, selling dollars to wealthy Chinese for buying houses, cars, yachts, and Harvard tuition, while sending clean cash back to the cartels. In so doing, the cartels can discreetly buy anti-aircraft guns and rocket launchers. Just as troubling, Chinese companies are the cartels’ primary source of the chemicals necessary to make synthetic opioids. China’s government actively incentivizes the manufacturing, international marketing, and export of fentanyl by both private and state-owned companies. The Chinese government offers tax breaks, large contracts, and awards for the export of the chemicals necessary to make fentanyl, while it simultaneously cracks down on the domestic drug trade and its supply chains.

In addition, while China claimed to have halted the direct sales of synthetic opioids to the United States in 2019, Chinese chemical manufacturers have found numerous workarounds. Not surprisingly, the Treasury Department has uncovered multiple instances of Chinese companies openly marketing and selling synthetic opioids directly to America over the last few years.

The Trump administration must leverage the full power of the U.S. economy to cripple the Chinese actors that fuel the devastating fentanyl epidemic responsible for the deaths of hundreds of thousands of Americans.

A maximum pressure campaign should begin with the Treasury Department’s re-sanctioning of the Chinese government institute that supported Uyghur human rights abuses. China itself understands the devastating toll of an opioid crisis, yet while the U.S. suffers, Beijing hides behind empty statements of cooperation.

Next, the federal government should aggressively confront the Chinese money-laundering networks that continue to operate within the United States with impunity. The administration should ramp up enforcement efforts against these gangs and cut off their access to U.S. financial institutions.

Likewise, Congress can help by passing a law requiring any Chinese national making purchases of more than $50,000 to prove the source of the funds. In so doing, lawmakers can shine a light on the buyers that sustain Chinese money-laundering networks.

The Treasury Department should also bring down the hammer with sweeping sanctions on the Chinese chemical companies that recklessly export fentanyl and its precursors to all buyers and on the banks that facilitate those transactions. In conjunction with this, the Trump administration should establish a U.S.-verified “white list” of legitimate international buyers of precursor chemicals, which would allow Chinese companies to avoid sanctions if they limit sales to “white-listed” buyers.

Washington should prioritize this campaign on all fronts, including as a key issue in the ongoing tariff negotiations with China. Access to the U.S. market provides significant leverage to force meaningful Chinese cooperation in combating fentanyl.

Fentanyl is a scourge on the United States, harming communities and ending lives. The Trump administration is already fighting a war against fentanyl and the cartels that sell it in the southern United States. Now is the time to engage on a second front, targeting the Chinese actors that sacrifice American lives for profit.

Josh Birenbaum is the deputy director of the Center on Economic and Financial Power at the Foundation for Defense of Democracies, where Susan Soh is a research associate.