Trump drafts order to curb foreign contraband as China talks stagnate

WASHINGTON >> The Trump administration has drafted an executive order that would increase inspections of mailed packages, in an effort to crack down on shipments of counterfeit goods and deadly drugs from foreign nations including China.

The order would empower the U.S. Postal Service to increase inspections of small packages that arrive in the country by air, according to several people familiar with the draft, who declined to be named because they were not authorized to speak publicly. That would help to close a loophole that has allowed dangerous drugs like the opioid fentanyl and other contraband to pass into the United States unchecked.

The measure is not aimed specifically at China. But it comes as talks between the United States and China about a trade deal have stagnated and as President Donald Trump continues to accuse China of failing to stop shipments of fentanyl from flowing into the United States. Trump said late last month that he was directing the Postal Service and private U.S. companies like FedEx, Amazon and UPS to search packages from China for fentanyl and refuse delivery. On Sept. 1, Trump slapped more tariffs on Chinese imports as punishment for Beijing’s failure to stop fentanyl shipments and its refusal to buy more agricultural goods from the United States.

“Fentanyl kills 100,000 Americans a year. President Xi said this would stop — it didn’t,” Trump said in a tweet last month, referring to Xi Jinping, China’s president.

The executive order would apply solely to the Postal Service, not private companies like FedEx or UPS. The order is drafted to apply to all countries, though the effects would fall most heavily on China, a major source of both counterfeit products and fentanyl as well as small packages shipped into the United States.

Despite months of talks, negotiators still appear far from a comprehensive trade deal that would resolve the Trump administration’s concerns about Chinese economic practices, including its infringement on U.S. intellectual property.

The two sides were on the cusp of an agreement this spring, when Chinese leaders decided that some U.S. demands to change their laws infringed too much on Chinese sovereignty. Since then, Trump has moved ahead with taxing an additional $112 billion of Chinese products and is expected to raise tariffs even further in the coming weeks. China imposed additional tariffs on $75 billion worth of U.S. goods in retaliation.

Tensions between the two sides have eased slightly in recent weeks, with Chinese officials agreeing to travel to the United States in October for the next round of talks. On Wednesday, China published a short list of U.S. products that would be exempt from its new tariffs and said it would announce more exemptions in coming weeks.

Trump greeted the exemptions as a sign that China would soon compromise.

“China suspends Tariffs on some U.S. products. Being hit very hard, supply chains breaking up as many companies move, or look to move, to other countries. Much more expensive to China than originally thought,” Trump said in a tweet that apparently quoted comments made by a CNBC anchor.

Even so, China and the United States appear to have made little progress on the substantive differences that have prevented them from signing an agreement. Chinese officials have emphasized recent changes they have made to laws governing foreign investment and intellectual property, rather than discussing the more substantial changes the Trump administration has demanded.

Trump has ordered U.S. companies out of China and expressed satisfaction at the damage his tariffs are wreaking on its economy. The president is expected to increase tariffs on $250 billion worth of Chinese goods to 30% on Oct. 1 from the current 25% and plans another round of tariffs in December.

In recent months, some of the focus has shifted away from the terms of the trade deal itself, on which the United States and China remain at a stalemate, to whether there can be an interim agreement that would involve Chinese purchases of U.S. agricultural products and smooth over relations between the countries.

Chinese officials and their contacts have floated the idea of restarting agricultural purchases, in return for the United States postponing further tariff increases and offering some relief for Huawei, the Chinese telecom giant that has been blacklisted from purchasing U.S. products, several people familiar with the matter said.

Trump has been deeply frustrated by China’s refusal to purchase U.S. agricultural products in recent months. The move would help the president by buoying a constituency that is important for him politically and also increasingly opposed to the trade war.

But such an interim agreement has also proved elusive. The president and his advisers are increasingly aware of the national security risk posed by Huawei and cognizant that they would face criticism from Democrats and Republicans alike if they relent. U.S. officials may consider removing some tariffs in return for economic concessions from China, but they are unlikely to do so for agricultural purchases, Trump’s allies say.

The Chinese, meanwhile, know that agricultural purchases would reduce the political pressure on Trump and potentially increase his chances of reelection, and they are not likely to trade away this source of leverage easily, people familiar with their thinking said.

At a Senate hearing Tuesday, Treasury Secretary Steven Mnuchin said the two countries were discussing soybean purchases but pushed back on suggestions that the United States would be easily bought off.

“I’ve been accused at times of just wanting to sell soybeans. That’s not what we’re trying to do,” Mnuchin told lawmakers in the hearing. “We want to make sure that China treats our farmers fairly and doesn’t retaliate against the farmers in an unfair way.

“As part of any discussion, we are talking about ag purchases,” he told reporters in comments after the hearing. “That’s very important to us, defending our farmers.”