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Tariffs have always been a multi-use tool. From the beginning of the 2nd Trump Administration, tariffs have been used increasingly as an instrument of economic pressure to achieve foreign policy ends. That, anyway, is the substance of the formal and textual justifications for their use in some cases.
Prominent among these has been the use of tariffs as a formal countermeasure against, and as a nudging instrument directed to, China. The initial action was taken in a 1 February 2025 Executive Order (Executive Order 14195) in which it was declared that China "has subsidized and otherwise incentivized PRC chemical companies to export fentanyl and related precursor chemicals that are used to produce synthetic opioids sold illicitly in the United States." In addition, it was declared, that "the PRC provides support to and safe haven for PRC-origin transnational criminal organizations (TCOs) that launder the revenues from the production, shipment, and sale of illicit synthetic opioids. These PRC-origin TCOs coordinate and communicate using PRC social media software applications in the conduct of their business." Moreover, it was further declared, that "[m]any PRC-based chemical companies also go to great lengths to evade law enforcement and hide illicit substances in the flow of legitimate commerce. Some of the techniques employed by these PRC-based companies to conceal the true contents of the parcels and the identity of the distributors include the use of re-shippers in the United States, false invoices, fraudulent postage, and deceptive packaging." These and related findings provided a basis for the declaration of national emergency, one that was exacerbated because,despite bilateral talks, "PRC officials have failed to follow through with the decisive actions needed to stem the flow of precursor chemicals to known criminal cartels and shut down the money laundering TCOs."
On that basis the President invoked statutory authority to impose countermeasures to meet the threat described in the Executive Order. Those countermeasures consisted on an imposition of a general tariff of 10% on all Chinese goods (§2).
One month later, roughly, the President again invoked his authority to declare that no adequate progress appeared to have been made on the Chinese side to reduce the flow of illicit substances described in Executive Order 14195). On 3 March 2025, the President issued an Executive Order: Further Amendment to Duties Addressing the Synthetic Opioid Supply Chain in the People’s Republic of China, the purpose of which was to increase the rate of the general tariff to 20%.
One might think more broadly about the effects and structuring of tariff nudges. Not in the sense that they are wrongheaded, but rather in the sense that they are merely an initial step in what might be a longer term structural strategy for behavior changing.In designing nudges, the focus should shift toward helping individuals follow through with their decisions, complementing nudges with strategies that promote sustained engagement and behavior change. For instance, people get more motivated for tasks when you turn the jobs into games and let them share their achievements on leaderboards. (Think of the popularity of Wordle.) * * * In the end, though, the main takeaway from our research is that nudges may be a great first step. But that’s all they are: a first step. Much of the hard work is what comes next. (The Problem With Behavioral Nudges; Wall Street Journal 2024)
That is, tariffs might well be a useful initial nudging instrument. But of course, tariff instruments have no ideology. And the Chinese, prepared for this it seems, have adopted retaliatory tariffs of their own. "China’s finance ministry announced 15 percent tariffs on imports of chicken, wheat, corn and cotton from the United States, as well as 10 percent tariffs on imports of sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products." (New York Times)
Nonetheless, without a longer term strategy that enhances or is otherwise aligned with America First objectives and also with Chinese win-win strategies, long term behavior changes will be a more challenging goal to reach. That will require action no just by the Chinese to clean up their house but also some action by the United States to see to the messiness in its own. It is possible, under that framework, for a mutually beneficial pathway may be opened up that might reset the forms and rules of trade in pharma between the states, but also aid in mutually reinforcing anti-corruption and anti-crime measures. In that context both states ill have to exhibit levels of resolve (and trust) that may not be achievable currently but for which initial steps may be taken along that path. Trust between hegemons is essential for a stable global system that each appears to want.
The action was not isolated but, as was the case with the initial tariff decisions, was made in tandem with those applied to Canada and Mexico respecting actions which the White House has declared, adversely affect the territorial integrity of the United States and the stability of its political-social order. (See Amendment to Duties to Address the Situation at our Southern Border (Amendment to Duties to Address the Flow of Illicit Drugs across our Northern Border (
The text of both the 1 February and the 3 March Executive Orders on China are set forth below. The Fact Sheet: President Donald J. Trump Proceeds with Tariffs on Imports from Canada and Mexico also follows below.
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), section 604 of the Trade Act of 1974, as amended (19 U.S.C. 2483), and section 301 of title 3, United States Code, I hereby determine and order:
Section 1. Background.
With Executive Order 14195 of February 1, 2025 (Imposing Duties to
Address the Synthetic Opioid Supply Chain in the People’s Republic of
China), I determined that the failure of the Government of the People’s
Republic of China (PRC) to act to blunt the sustained influx of
synthetic opioids, including fentanyl, flowing from the PRC to the
United States constituted an unusual and extraordinary threat, which has
its source in substantial part outside the United States, to the
national security, foreign policy, and economy of the United States. To
address that threat, I invoked my authority under section 1702(a)(1)(B)
of IEEPA to impose ad valorem tariffs on articles that are products of
the PRC, as defined by the Federal Register notice described in
section 2(d) of Executive Order 14195, as amended by Executive Order
14200 of February 5, 2025 (Amendment to Duties Addressing the Synthetic
Opioid Supply Chain in the People’s Republic of China).
Pursuant to section 3 of
Executive Order 14195, I have determined that the PRC has not taken
adequate steps to alleviate the illicit drug crisis through cooperative
enforcement actions, and that the crisis described in Executive Order
14195 has not abated.
Sec. 2. Amendment.
In recognition of the fact that the PRC has not taken adequate steps to
alleviate the illicit drug crisis, section 2(a) of Executive Order
14195 is hereby amended by striking the words “10 percent” and inserting
in lieu thereof the words “20 percent”.
Sec. 3. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department, agency, or the head thereof; or
(ii) the functions of the Director of the Office of
Management and Budget relating to budgetary, administrative, or
legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any
right or benefit, substantive or procedural, enforceable at law or in
equity by any party against the United States, its departments,
agencies, or entities, its officers, employees, or agents, or any other
person.
THE WHITE HOUSE,
March 3, 2025.
* * *
Executive Order 14195 of February 1, 2025
Imposing Duties To Address the Synthetic Opioid Supply Chain in the People's Republic of China
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA), section 604 of the Trade Act of 1974, as amended (19 U.S.C. 2483), and section 301 of title 3, United States Code,
I, DONALD J. TRUMP, President of the United States of America, find that the sustained influx of synthetic opioids has profound consequences on our Nation, including by killing approximately two hundred Americans per day, putting a severe strain on our healthcare system, ravaging our communities, and destroying our families. Synthetic opioid overdose is the leading cause of death for people aged 18 to 45 in the United States.
During my first term, I took steps to end the direct flow of fentanyl and other synthetic opioids from the People's Republic of China (PRC) to the United States. Since then, the Chinese Communist Party (CCP), which exerts ultimate control over the government and enterprises of the PRC, has subsidized and otherwise incentivized PRC chemical companies to export fentanyl and related precursor chemicals that are used to produce synthetic opioids sold illicitly in the United States.
Furthermore, the PRC provides support to and safe haven for PRC-origin transnational criminal organizations (TCOs) that launder the revenues from the production, shipment, and sale of illicit synthetic opioids. These PRC-origin TCOs coordinate and communicate using PRC social media software applications in the conduct of their business.
Many PRC-based chemical companies also go to great lengths to evade law enforcement and hide illicit substances in the flow of legitimate commerce. Some of the techniques employed by these PRC-based companies to conceal the true contents of the parcels and the identity of the distributors include the use of re-shippers in the United States, false invoices, fraudulent postage, and deceptive packaging. While more than 500,000 pounds of drugs have been seized at the southern border each of the last 3 fiscal years, in addition, more than 42,000 pounds of drugs have been seized at the northern border each year on average over the last 3 years. Illicit drugs kill tens of thousands of Americans each year, including 75,000 deaths per year attributed to fentanyl alone.
The influx of these drugs to our Nation threatens the fabric of our society. The PRC plays a central role in this challenge, not merely by failing to stem the ultimate source of many illicit drugs distributed in the United States, but by actively sustaining and expanding the business of poisoning our citizens.
The flow of contraband drugs like fentanyl to the United States through illicit distribution networks has created a national emergency, including a public health crisis in the United States, as outlined in the Presidential Memorandum of January 20, 2025 (America First Trade Policy), Proclamation 10886 of January 20, 2025 (Declaring a National Emergency at the Southern Border of the United States), and Executive Order 14157 of January 20, 2025 (Designating Cartels and Other Organizations as Foreign Terrorist Organizations and Specially Designated Global Terrorists).
Despite multiple attempts to resolve this crisis at its root source through bilateral dialogue, PRC officials have failed to follow through with the decisive actions needed to stem the flow of precursor chemicals to known criminal cartels and shut down the money laundering TCOs. The PRC implements the most sophisticated domestic surveillance network coupled with the most comprehensive domestic law enforcement apparatus in the world. The PRC also routinely exerts extraterritorial reach across the globe to threaten, harass, and suppress what it views as political dissent. As such, the CCP does not lack the capacity to severely blunt the global illicit opioid epidemic; it simply is unwilling to do so.
Immediate action is required to address the national emergency I declared and to finally end this emergency, including the public health crisis caused by opioid use and addiction, which will not happen until the full compliance and cooperation of the PRC government is assured.
I hereby determine and order:
Section 1 . (a) As President of the United States, my highest duty is the defense of the country and its citizens. I will not stand by and allow our citizens to be poisoned, our laws to be trampled, our communities to be ravaged, or our families to be destroyed.
I previously declared a national emergency with respect to the grave threat to the United States posed by the influx of illegal aliens and drugs into the United States in Proclamation 10886. Pursuant to the NEA, I hereby expand the scope of the national emergency declared in that proclamation to cover the failure of the PRC government to arrest, seize, detain, or otherwise intercept chemical precursor suppliers, money launderers, other TCOs, criminals at large, and drugs. In addition, this failure to act constitutes an unusual and extraordinary threat, which has its source in substantial part outside the United States, to the national security, foreign policy, and economy of the United States. I hereby declare and reiterate a national emergency under the NEA and IEEPA to deal with that threat. This national emergency requires decisive and immediate action, and I have decided to impose, consistent with law, ad valorem tariffs on articles that are products of the PRC as set forth in this order. In doing so, I invoke my authority under section 1702(a)(1)(B) of IEEPA, and specifically find that action under other authority to impose tariffs is inadequate to address this unusual and extraordinary threat.
Sec. 2 . (a) All articles that are products of the PRC, as defined by the Federal Register notice described in section 2(d) of this order (the Federal Register notice), shall be, consistent with law, subject to an additional 10 percent ad valorem rate of duty. Such rate of duty shall apply with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern time on February 4, 2025, except that goods entered for consumption, or withdrawn from warehouse for consumption, after such time that were loaded onto a vessel at the port of loading or in transit on the final mode of transport prior to entry into the United States before 12:01 a.m. eastern time on February 1, 2025, shall not be subject to such additional duty, only if the importer certifies to U.S. Customs and Border Protection within the Department of Homeland Security as specified in the Federal Register notice.
(b) The rates of duty established by this order are in addition to any other duties, fees, exactions, or charges applicable to such imported articles.
(c) Should the PRC retaliate against the United States in response to this action through import duties on United States exports to the PRC or similar measures, the President may increase or expand in scope the duties imposed under this Executive Order to ensure the efficacy of this action.
(d) In order to establish the duty rate on imports of articles that are products of the PRC, the Secretary of Homeland Security shall determine the modifications necessary to the Harmonized Tariff Schedule of the United States (HTSUS) in order to effectuate the objectives of this order consistent with law and shall make such modifications to the HTSUS through notice in the Federal Register. The modifications made to the HTSUS by this notice shall be effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern time on February 4, 2025, except as otherwise noted in subsection 2(a) of this section, and shall continue in effect until such actions are expressly reduced, modified, or terminated.
(e) Articles that are products of the PRC, except those that are eligible for admission under “domestic status” as defined in 19 CFR 146.43, which are subject to the duties imposed by this order and are admitted into a United States foreign trade zone on or after 12:01 a.m. eastern time on February 4, 2025, except as otherwise noted in subsection 2(a) of this section, must be admitted as “privileged foreign status” as defined in 19 CFR 146.41. Such articles will be subject upon entry for consumption to the rates of duty related to the classification under the applicable HTSUS subheading in effect at the time of admittance into the United States foreign trade zone.
(f) No drawback shall be available with respect to the duties imposed pursuant to this order.
(g) For avoidance of doubt, duty-free de minimis treatment under 19 U.S.C. 1321 shall not be available for the articles described in subsection (a) of this section.
(h) Any prior Presidential Proclamation, Executive Order, or other presidential directive or guidance related to trade with the PRC that is inconsistent with the direction in this order is hereby terminated, suspended, or modified to the extent necessary to give full effect to this order.
(i) The articles described in subsection (a) of this section shall exclude those encompassed by 50 U.S.C. 1702(b).
Sec. 3 . (a) The Secretary of Homeland Security shall regularly consult with the Secretary of State, the Attorney General, the Assistant to the President for National Security Affairs, the Attorney General, and the Assistant to the President for Homeland Security on the situation regarding the PRC. The Secretary of Homeland Security shall inform the President of any circumstances that, in the opinion of the Secretary of Homeland Security, indicate that the PRC government has taken adequate steps to alleviate the opioid crisis through cooperative actions. Upon the President's determination of sufficient action to alleviate the crisis, the tariffs described in section 2 of this order will be removed.
(b) The Secretary of Homeland Security, in coordination with the Secretary of State, the Attorney General, the Assistant to the President for National Security Affairs, and the Assistant to the President for Homeland Security, shall recommend additional action, if necessary, should the PRC fail to take adequate steps to alleviate the illicit drug crisis through cooperative enforcement actions.
Sec. 4 . The Secretary of Homeland Security, in consultation with the Secretary of the Treasury, the Attorney General, and the Secretary of Commerce, is hereby authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to the President by IEEPA as may be necessary to implement this order. The Secretary of Homeland Security may, consistent with applicable law, redelegate any of these functions within the Department of Homeland Security. All executive departments and agencies shall take all appropriate measures within their authority to implement this order.
Sec. 5 . The Secretary of Homeland Security, in coordination with the Secretary of the Treasury, the Secretary of Commerce, the Assistant to the President for National Security Affairs, the Attorney General, and the Assistant to the President for Homeland Security, is hereby authorized to submit recurring and final reports to the Congress on the national emergency under IEEPA declared in this order, consistent with section 401(c) of the NEA (50 U.S.C. 1641(c)) and section 204(c) of IEEPA (50 U.S.C. 1703(c)).
Sec. 6 . General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department, agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
* * *
SAFEGUARDING THE NATION: President Donald J. Trump is proceeding with implementing tariffs on Canada and Mexico under the International Emergency Economic Powers Act (IEEPA) to combat the extraordinary threat to U.S. national security, including our public health posed by unchecked drug trafficking.
- While President Trump gave both Canada and Mexico ample opportunity to curb the dangerous cartel activity and influx of lethal drugs flowing into our country, they have failed to adequately address the situation.
- The flow of contraband drugs like fentanyl into the United States, through illicit distribution networks, has created a national emergency, including a public health crisis.
- Mexican drug trafficking organizations, the world’s leading fentanyl
traffickers, operate unhindered due to an intolerable relationship with
the government of Mexico.
- The government of Mexico has afforded safe havens for the cartels to engage in the manufacturing and transportation of dangerous narcotics, which collectively have led to the overdose deaths of hundreds of thousands of American victims.
- Mexican drug cartels are known for extreme brutality, corruption, and control over entire regions of Mexico.
- The Sinaloa and Jalisco cartels manufacture fentanyl in clandestine labs they oversee in Mexico, in both powder form and pressed into fake pills, and traffic it into the United States through the many entry points they control. 97% of seizures occur at the U.S.-Mexico border.
- Cartel violence, including armed drones and roadside IEDs, are coming in closer and closer proximity to the U.S.-Mexico border as cartels are more actively targeting one another as well as Mexican military and law enforcement personnel.
- This alliance with the Mexican government endangers the national security of the United States, and we must eradicate the influence of these dangerous cartels.
- There is also a growing presence of Mexican cartels operating fentanyl and nitazene synthesis labs in Canada.
- A recent study recognized Canada’s heightened domestic production of fentanyl, and its growing footprint within international narcotics distribution.
- Canada-based drug trafficking organizations maintain robust “super labs,” mostly in rural and dense areas in western Canada, some of which can produce 44 to 66 pounds of fentanyl weekly.
- Last year’s northern border fentanyl seizures, though smaller than Mexico’s, could kill 9.5 million Americans due to the drug’s potency—proof of Canada’s growing role in this crisis.
- Fentanyl seizures at the northern border in the first four months of this fiscal year are quickly closing in on what was seized the entirety of fiscal year 2022.
- Both nations’ failure to arrest traffickers, seize drugs, or coordinate with U.S. law enforcement constitutes an unusual and extraordinary threat to America’s security—demanding IEEPA action to force accountability and protect American lives.
PRESIDENT TRUMP IS KEEPING HIS PROMISE TO STOP THE FLOOD OF ILLEGAL ALIENS AND DRUGS: When voters overwhelmingly elected Donald J. Trump as President, they gave him a mandate to seal the border. That is exactly what he is doing.
- The Biden Administration’s policies fueled the worst border crisis in U.S. history.
- More than 10 million illegal aliens attempted to enter the United States under Biden’s leadership.
- This problem is not confined to the southern border—encounters at the northern border with Canada are rising as well.
- The sustained influx of illegal aliens has profound consequences on every aspect of our national life—overwhelming our schools, lowering our wages, reducing our housing supply and raising rents, overcrowding our hospitals, draining our welfare system, and causing crime.
- Gang members, smugglers, human traffickers, and illegal drugs and
narcotics of all kinds are pouring across our borders and into our
communities.
- Last fiscal year, Customs and Border Protection (CBP) apprehended more than 21,000 pounds of fentanyl at our borders, enough fentanyl to kill more than 4 billion people.
- Since 2023, the Drug Enforcement Administration (DEA) has seized more than 25,697 kilograms of fentanyl pills and more than 7,272 kilograms of fentanyl powder at the southern border, and more than 659 kilograms of fentanyl pills and more than 650 kilograms of fentanyl powder at the northern border.
- From 2021 to present, fentanyl has been the leading cause of drug overdose deaths in the U.S., followed by methamphetamine, cocaine, and heroin in that order.
- According to the CDC, 68 percent of all drug poisoning deaths in 2022 and 2023—216,294 total—were caused by synthetic opioids, primarily fentanyl.
- It is estimated that federal officials are only able to seize a fraction of the fentanyl smuggled across the southern border.
- More Americans are dying from fentanyl overdoses each year than the number of American lives lost in the entirety of the Vietnam War.
BUILDING ON PAST SUCCESS: President Trump continues to demonstrate his commitment to ensuring U.S. trade policy serves the national interest.
- As President Trump said in the Presidential Memorandum on American First Trade Policy, trade policy is a critical component in national security.
- President Trump promised in November to “sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders. This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”
- During his first term as President of the United States, President Trump established the President’s Commission on Combating Drug Addiction and the Opioid Crisis and declared the Opioid Crisis a public health emergency.
- President Trump also has a long record of putting America first on trade. In his first term, President Trump successfully used threats of tariffs on Mexico to help secure our border.
- When our national security was threatened by a global oversupply of steel and aluminum, President Trump took swift action to protect America’s national security by implementing tariffs on imports of these goods.
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