China is considering a proposal to curb fentanyl production and exports as part of efforts to restart trade negotiations with the U.S., according to the Wall Street Journal. This marks one of Beijing’s most significant diplomatic signals since trade tensions escalated under President Trump’s “reciprocal” tariffs.
Why it matters:
The U.S. has long accused China of being a major source of fentanyl, the synthetic opioid driving America’s overdose crisis. Addressing the fentanyl issue could unlock stalled trade talks and ease tensions between the world’s two largest economies.
What’s driving this move:
- China’s Commerce Ministry confirmed it is “currently evaluating” U.S. proposals, signalling a shift in tone that markets welcomed.
- The offer comes as President Trump’s 90-day pause on new tariffs except on China nears its midpoint, putting pressure on negotiators to show progress.
Market reaction:
- Wall Street rallied on Friday, partly on optimism over China’s willingness to engage, with the S&P 500 logging its longest win streak since 2004.
- Investors see the potential fentanyl pledge as a confidence-building measure that could pave the way for broader deals.
U.S. and Chinese officials are expected to hold informal talks in coming weeks, with fentanyl controls likely a top agenda item. Analysts warn that broader disagreements over tariffs, intellectual property, and technology remain unresolved, leaving markets on edge.
