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By Shane Croucher
Senior Editor
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U.S. Treasury Secretary Scott Bessent hailed the progress made with China on tackling fentanyl at trade talks in Switzerland, saying Beijing is "now serious" about the issue.
The talks also resulted in the suspension for 90 days of very high tariffs between the world's two largest economies, respite in a trade war that has brought about fears of a recession.
Sweeping tariffs still remain in place during the pause. A 145 percent US tariff on most Chinese imports will be reduced to 30 percent, including a 20 percent rate tied to fentanyl, while a 125 percent China tariff on U.S. goods will drop to 10 percent, officials said in Geneva on Monday.
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Why It Matters
The comments raise the prospect that if China takes action the U.S. deems to be sufficient, a 20 percent tariff the U.S. imposed over fentanyl concerns could eventually come down, or even off completely.
Bessent's comments suggests the U.S. may be closer to solving a drug epidemic that has killed hundreds of thousands of Americans, many of whom are struggling with addiction to opioids, often due to reliance on prescription pain medication.
The White House says fentanyl is attributed to 75,000 deaths each year in the U.S. alone, and last year, Customs and Border Patrol (CBP) seized more than 21,000 pounds of fentanyl at the U.S. border.
What to Know
A 20 percent tariff on Chinese goods related to the country's role in the fentanyl trade remains in place. Fentanyl is a highly potent synthetic opioid behind a surge in drug overdose deaths in the U.S.
"This is a priority for President Trump and indeed the whole administration," Bessent told CNBC's "Squawk Box" on Monday morning.
"I have a personal stake in this. There are two very close friends [who] lost children to this terrible scourge. Hundreds of thousands of Americans die every year.
"And I think that we saw here in Geneva the Chinese are now serious about assisting the U.S. in stopping the flow of precursor drugs."
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Bessent noted the presence in the Chinese delegation of a deputy minister for public safety, whom he said was their "fentanyl expert."
"We brought someone from our national security staff and they had a very long and in-depth sidebar about how our two countries could work together," Bessent told CNBC.
At a press briefing in Geneva earlier in the morning, Bessent said the "upside surprise for me" at the trade talks was the "level of Chinese engagement on the fentanyl crisis".
In March, the Chinese government published a white paper laying out its purported efforts to crack down on the fentanyl trade, and hit back at U.S. criticism as Washington imposed a tariff over the issue.
"Facts speak louder than words," a spokesperson for the Chinese foreign ministry said at the time. "The U.S. is spreading all kinds of false information on the fentanyl issue, smearing and scapegoating China, and hiking tariffs on Chinese imports over fentanyl."
The White House has accused Chinese firms of shipping illegal drugs, including fentanyl, in low-value packages.
It said the ruling Chinese Communist Party has "subsidized and otherwise incentivized" chemical companies "to export fentanyl and related precursor chemicals that are used to produce synthetic opioids sold illicitly" in the U.S., per a fact sheet published in April.
These Chinese firms "hide illicit substances in the flow of legitimate commerce, including through false invoices, fraudulent postage, and deceptive packaging," the White House said.
What People Are Saying
President Donald Trump said at a White House briefing on Monday morning: "We're charging [China] 20 percent for the fact that they send fentanyl into the country, and they've agreed that they're going to stop that. And they'll be rewarded by not having to pay hundreds of billions of dollars in tariffs. So, the fentanyl should stop.
"It comes from China...There's a big incentive for them to stop and I take them at their word. They're going to work on that, I think, very hard."
What Happens Next
The U.S. agreement with China includes a mechanism for further talks, which will take place over the coming 90 days, including on resolving the fentanyl issue.
If talks go well, consumers could see some easing, as Trump has suggested, of the tariffs on Chinese goods.
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