Even as the US and China initiate a tentative 90-day ceasefire in their spiraling trade war, an unexpected hero has appeared: China’s Public Security Minister and advisor to President Xi Jinping, Wang Xiaohong. China’s powerful “drug czar,” whose authority extends far beyond domestic policing, has inadvertently become a central figure in contentious trade negotiations with the US. The negotiations are centered around the fentanyl issue—a US public health issue transformed into a bilateral tensions pressure point. This article examines Wang’s large role, the economic and diplomatic costs of the tariffs, and the broader arena of US-China tensions.
The Fentanyl Crisis and Threatened Tariffs by Trump
America’s opioid epidemic, partly caused by fentanyl and fentanyl precursors exported from China, has killed tens of thousands of Americans over the past year. US President Donald Trump has used the epidemic as a bargaining chip in trade negotiations with China, threatening to impose a 20% tariff on Chinese imports over what he sees as China’s inaction regarding fentanyl shipments. It would be a significant setback to China’s export-dependent economy, particularly small and medium-sized businesses already hard-pressed by trade uncertainty.
The fentanyl crisis is as much a geopolitical tool as it is a public health crisis. Trump’s 20% tariff threat has the impact of putting pressure on China to suppress the manufacture and trafficking of fentanyl precursors usually produced by China’s loosely controlled chemistry industry. The 20% tariff threat has already had its impact across the Chinese markets, stoking fears of more economic pressure at a time when China must contend with slowing growth, a battered property market, and weakening consumer confidence.
China’s Drug Czar and Diplomatic Linchpin: Wang Xiaohong
Enter Wang Xiaohong, the Minister of Public Security for Xi Jinping, who has become a central figure in addressing both the fentanyl epidemic and the larger US-China trade war. As head of China’s giant law enforcement and security apparatus, Wang oversees China’s attempts to regulate the chemical industry and interdict illicit drug trafficking organizations. His role in trade negotiations, however, represents a significant expansion of his mandate, and it fits in with a broader trend of Xi giving the most significant economic and diplomatic affairs to loyalists he can count on.
Wang’s role underscores the interdependent relationship between security and trade in US-China affairs. Whether he can deliver tangible results—be it increased interdictions of precursors to the fentanyl used in the US opiates epidemic or stricter controls over Chinese chemicals firms—will decide whether the 90-day trade-war truce will hold or devolve into a heightened trade war. Wang’s role both as a security disciplinarian and a bargainer locates him at the intersection of China’s domestic agendas and its international obligations.
Economic Impact on Chinese Exporters
The 90-day ceasefire, brokered to put the trade war on hold, gives some short-term relief to Chinese exporters, particularly small- and medium-sized businesses exporting cheap commodities to the US. These firms, already operating on wafer-thin profit margins, have been hammered by the earlier rounds of US tariffs. The threat of yet another 20% tariff would render their products uncompetitive, the likely result being retrenchments or shutdowns. The risks to China’s overall economy, owing to its dependence on exports, are enormous.
The pause allows room for breath, but the ball is still in the court of Wang and his colleagues to show progress on fentanyl enforcement. If they fail to do so, the tariffs would be triggered, adding to China’s economic pain at a moment when Xi’s administration is placing “regime security” ahead of sweeping economic reform. This prioritization of political stability, as we read in associated commentary, indicates Beijing might be hesitant to offer wide-ranging concessions that might be interpreted as a display of weakness domestically.
An Enlarged Geopolitical Chessboard
The fentanyl tariff represents only one part of a contentious US-China relationship plagued by issues from intellectual property theft to Taiwan Strait military brinksmanship. The stance taken by Wang Xiaohong illustrates the extent to which seemingly disparate issues—narcotics control, trade policy, and geopolitics—are increasingly interconnected. His negotiations with US counterparts, ranging from the Drug Enforcement Administration (DEA) to the Commerce Department, amount to a balancing act. China must make progress adequate to allay Washington’s concerns while avoiding making concessions to the point of undermining the authority of its leader, Xi Jinping.
In addition, Trump’s trade strategy has inadvertently served to bring China’s attempt to project itself as a protector of the world’s free trade to the forefront. Ideas like the Regional Comprehensive Economic Partnership (RCEP) and the overall trend toward multi-lateral trade pacts contrast with US protectionism. Wang’s skills at solving the fentanyl issue might strengthen China’s credentials as a responsible international actor even as it struggles with homegrown issues, including inter-factional strife and economic instability.
Xi’s Loyalist and the Domestic Context
Wang Xiaohong’s appointment reflects the prioritization of loyalists by Xi Jinping to consolidate authority. A close, longtime associate, Wang’s 2022 appointment at the Ministry of Public Security signalled the desire of Xi to consolidate China’s security apparatus. His further appointment to trade negotiations further reflects the reliance of Xi on loyalists to manage crises threatening economic stability and regime legitimation.
However, Wang must also juggle a tense domestic politics. Reports over recent times, including the Nikkei Asia series “China Up Close,” detail intra-party disputes in the Chinese Communist Party and the disappearance of Xi’s personal generals. The politics suggest the negotiations of Wang are at least as much about appeasing the U.S. as intervening in domestic intra-party disputes. The emphasis of Xi on “regime security” might limit the scope of what Wang can deliver since any compromise to United States demands can be used by inter-party opponents.
Global Implications and the Way Forward
The consequence of the 90-day pause would have far-reaching impacts on US-China relations and the world economy. If Wang can bring tangible results on fentanyl enforcement—such as shutting down clandestine production centers or improving international cooperation—the pause can result in broader trade easing. It would not only ease economic stress on Chinese exporters but would give a boost to Beijing’s negotiating strength elsewhere too, including over Taiwan and technology transfers.
Conversely, failing to address the problems of the United States would trigger the 20% tariff, the impact of which would exacerbate China’s economic hardships and create increased tensions. The impact would be felt across the globe as supply chain disruption and raised costs would impact the markets outside the United States and China. American consumers would feel the tariffs in terms of raised costs of common commodities, while Chinese businesses would stand to lose their largest market.
Conclusion
A Moment of High Stakes Wang Xiaohong’s emergence as China’s fentanyl-tariff bargainer with the US marks a shift in the US-China relationship.
Whether he succeeds in juggling China’s home front imperatives with external pressures will decide the endgame for the tariff truce and, by association, China’s economic and strategic path. During the 90-day countdown, the world has been holding its breath—both for China’s exporter’s physical survival and for the broader stakes of a relationship that remains one of the most consequential in geopolitics. What’s at stake for the Chinese business community, US policymakers, and the world’s markets has never been higher. The juggling act now performed by Wang will decide whether the ceasefire will last or a new phase of the US-China trade war will begin.
