The long road to a U.S.-China trade pact

Trump administration had for months been reluctant to reduce fentanyl-based tariffs

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President Trump rated his highly anticipated sit-down with Chinese leader Xi Jinping a 12 out of 10.

(AP)

In March, Sen. Steve Daines traveled to Beijing with a group of American CEOs in hopes of calming a tense trade relationship between the world’s two largest economies.

Weeks earlier, President Trump had added an additional 20% in tariffs on China over what he said was its role in the fentanyl trade. The Montana senator and close Trump ally, who lived in China and Hong Kong for six years in the 1990s as an executive for Procter & Gamble, saw an opening to smooth things over.

During the visit, Daines (R., Mont.) said he and Chinese Premier Li Qiang hammered out the outlines of a deal that would see the U.S. reduce its fentanyl tariffs on China in return for Beijing’s actions to cut off the shipment of fentanyl precursors—ingredients to make the drug—to the U.S.

The Trump administration was for months reluctant to reduce the fentanyl-based tariffs, despite several meetings with Chinese officials in Europe that brought reductions in other levies and temporary pauses in export controls from both economies.

The U.S. on Thursday finally accepted China’s offer, agreeing to reduce fentanyl-related tariffs from 20% to 10% in return for Beijing’s assurances that it would reduce shipments of fentanyl precursors. China also agreed to buy U.S. soybeans and pause export controls aimed at U.S. industries.

“[was framing that negotiation back in March on the fentanyl precursors with the premier, and I had lunch with Scott Bessent last week and suggested that soybeans and fentanyl precursors...could be takeaways from that meeting” in South Korea with China, Daines said in an interview, referring to the Treasury secretary.