US Officials Apply Pressure on China For Supplying Americans With Fentanyl

Ahead of the all important G20 meetings in Buenos Aires, US officials are floating an old story via the main stream regarding China’s involvement in the American opioid crisis. Approximately 70% of opioid related deaths are due to fentanyl and the supply is coming from China, via the US Post Office (mailed via gelatin tablets) or through the Mexican Cartel.

Back in August, Trump chimped out over this issue.

Source: BBG

A commission set up by the U.S. Congress said Chinese authorities are not doing enough to halt the flow of the synthetic opioid fentanyl and related chemicals into the U.S., where the substance has been linked to an epidemic of overdose deaths.

“U.S. officials have proposed strategies for Beijing to systematically control all fentanyl substances, but the changes have not been approved by the Chinese government,” Sean O’Connor, policy analyst for the U.S.-China Economic and Security Review Commission, wrote in a Nov. 26 report. Faxes seeking responses from the National Medical Products Administration and Ministry of Public Security were not immediately answered.

Fentanyl exporters have skirted Chinese laws by shifting to analogues, or molecules that have similar effects on the body, but do not fall under bans the country has imposed on fentanyl itself. China has been too slow to add new categories of analogues to the list of prohibited substances, according to the U.S. report.

President Donald Trump in October 2017 declared widespread opioid abuse a public health emergency and vowed to use the federal government’s legal powers to pursue companies that helped fuel the epidemic. Trump said at the time that he would raise the issue of Chinese fentanyl making its way to the U.S. with Chinese President Xi Jinping as a top priority “and he will do something about it.”

The commission reinforced a conclusion made in a February 2017 brief calling China “the largest source of illicit fentanyl and fentanyl-like substances in the United States.” Domestically, China does not have a fentanyl abuse problem, according to the report.

The opioid epidemic has emerged as one of the U.S.’s most pressing public health matters, claiming a life every 19 minutes, according to the U.S. Surgeon General. Cost estimates range, but a 2016 study in the Medical Care Journal estimated the annual economic cost of opioid overdose, abuse and dependence at $78.5 billion.

The U.S.-China Economic and Security Review Commission was created by Congress in October 2000 to investigate and submit an annual report on the national security implications of trade between the U.S. and China.

I’m sure most Americans aren’t aware of this information and that’s the point: gin up some real anger to gain public support for Trump’s trade war. As an investor, I view this two ways.

1. Trump is doubling down on his trade war and is trying to gain popular support.
2. Trump is using this issue as a wedge in his negotiations with President Xi to gain an edge.

Honestly, I haven’t a clue how this will be concluded. However, I do know, one way or another, this trade war will not last long.