I know what’s needed to end fentanyl crisis. Tariffs aren’t it

President Trump’s decision to impose sweeping tariffs on imports from Mexico, Canada, and China — which he justified under the International Emergency Economic Powers Act to combat the fentanyl crisis —makes good on a running threat to do so. It may appear bold to some or as an attempt to “negotiate” by others, but for many it is legally questionable, economically risky, and geopolitically shortsighted.

While America’s opioid epidemic is serious, tragic and certainly demands greater attention and more urgent action from the federal government, it is important to acknowledge the crisis has not gone unaddressed. In fact, I served on a bipartisan commission established under Section 7221 of the National Defense Authorization Act for Fiscal Year 2020 that was set up to examine all aspects of the synthetic opioid threat to the United States, specifically ways that the federal government can stem the illegal flow of these drugs into the United States. The commission produced a report with a long list of things that the federal government should undertake, and it focused on the challenges from both Mexico and China as well as some other emerging countries like India that could pose a future challenge on these issues. 

Despite the wide range of recommendations and months of discussion, the linkage of trade policy to narcotics enforcement was never seriously discussed, and many would argue that the linkages not only set a dangerous precedent but could in fact reduce the willingness of countries like Mexico and specifically China to cooperate as we seek to address this serious challenge. The move risks destabilizing fragile diplomatic efforts, potentially undermines constitutional prerogatives, authorities, and principles on trade, and threatens global supply chains critical to U.S. businesses.

Emergency powers are not a presidential blank check

We must be clear about the use of IEEPA as the instrument to levy these tariffs. It does indeed grant the president emergency powers to regulate economic transactions in the face of national security threats. However, this authority is not a blank check to the president. In fact, trade scholars note that the National Emergencies Act requires the president to formally declare an emergency, then engage in discussions and consultations with Congress, and publish the emergency proclamation in the Federal Register — steps that cannot be skipped. The Trump administration may take all these steps, but as of the weekend there was no indication that any of these steps have or will be undertaken.

To be clear, a fact sheet, like the one issued by the administration this weekend, is insufficient to meet the requirements of the IEEPA. Without following these legal protocols, the tariffs are vulnerable to legal challenges, with a high likelihood of being blocked by the courts. Businesses facing sudden shifts in tariffs should brace for more limbo, uncertainty, and potentially lots of legal ping-pong, where policies are announced, enjoined, and reversed on wash-rinse-and-repeat — creating uncertainty that markets despise.

A few Democratic senators moved to address the president’s action shortly before he followed through on the threat, but it would need support from more Democrats and, of course, Republicans. Sens. Chris Coons (D-Del.) and Tim Kaine (D-Va.) brought forward the Stopping Tariffs on Allies and Bolstering Legislative Exercise of Trade Policy Act on Thursday, which would require the president to elaborate on the decision to impose tariffs on U.S. allies and trading partners and how the tariffs would impact the U.S. economy and foreign policy priorities.

The problem with punishing allies

Beyond domestic law, the tariffs on Canada and Mexico likely violate the U.S.-Mexico-Canada Agreement, according to many trade experts, a treaty designed to eliminate most tariffs and establish fair dispute resolution mechanisms. Imposing unilateral tariffs on Canada and Mexico without exhausting legal remedies provided for under the USMCA erodes trust with key trading partners.

For businesses, this could and likely will mean retaliatory tariffs, some of which have already been hinted at by Canada and Mexico, targeting sensitive U.S. industries — from agriculture to automotive — impacting supply chains and consumer prices. Turning America’s largest trading partners into political punching bags is bad for business and worse for national security.

The most difficult thing to understand is how the linking of tariffs to the flow of fentanyl, and threatening Mexico and China — not to mention Canada, with a very small role in the flow of fentanyl — will achieve the very worthy objective of stemming the flow. In my world, the policy approach should have some realistic and practical chance of meeting the policy objectives. In this case, the actions reflect a fundamental misunderstanding of the complex dynamics at play.

Let’s take Mexico first. The drug trade is not merely a government failure; it’s a battle against cartels that often outgun local authorities, in part because of an endless flow of U.S. manufactured high-powered weapons. Trump’s demands could in fact push the government of Mexico toward a hot war with a heavily armed and lethal group of organized crime cartels, destabilizing the country and exacerbating the very border crisis the policy also intends to address.

In the case of China, the situation is equally fragile. Ironically, one of the few “wins” from President Biden’s meeting with Xi Jinping during the 2023 APEC Summit was an agreement to cooperate on curbing fentanyl precursors. However, by slapping tariffs on China under the guise of fentanyl control, Trump risks unraveling this diplomatic progress. China is unlikely to respond positively to threats. If anything, it may reduce cooperation, with China seeing no real value in doing anything under duress.

America’s drug demand crisis

Let’s not ignore the obvious: the real crisis lies within U.S. borders. In 2022 alone, over 75,000 Americans died from fentanyl overdoses. Law enforcement seized enough fentanyl to kill every American multiple times over. This is not just a supply problem — it’s a demand problem.

No amount of tariffs will curb addiction. What’s needed is a comprehensive strategy that includes addiction treatment, mental health services, public health campaigns, and community-based interventions. Businesses know better than most about the necessity of understanding and managing the supply-demand curve relationships and that solving complex problem requires government to acknowledge this as well, and do more than just use blunt instruments. If this administration wants the government to act more like the private sector — an idea I am not always a fan of – it does apply here.

Since November, the business community may have soothed itself by believing that Trump was bluffing, or negotiating, or trying to extract concessions, which may or may not be true. However, the question now is at what cost, and by what set of tradeoffs? The lessons of the first trade war from 2018 should have made it clear that other countries have agency (some like China, more than others) and that what starts small usually ends up in a race to the bottom, with rounds of retaliation and tit-for-tat responses that get out of control. Trade wars like hot wars are easy to start but not always easy to control or bring to an end, with the cost and the tradeoffs tending to be worse than the conditions that they intend to resolve. 

The fight against fentanyl is critical and every life that is lost is one life too many. But tariffs are not the tool to deal with the crisis. Tariffs are taxes on American companies and consumers. They disrupt supply chains, create market volatility, and introduce policy unpredictability. Weaponizing trade policy for unrelated issues —whether immigration, drugs, or security — erodes America’s credibility as a reliable economic partner. Most importantly and unfortunately, they will not stem the flow of fentanyl.

Smart policy requires more than tough talk. It demands more policy rigor, diplomatic finesse, and a clear-eyed view and understanding that there are both supply and demand dynamics at work when trying to address the fentanyl crisis. The business community, and the American public, must not lose sight of the risks that this action will create. Congress has the power to take back its delegated constitutional powers on trade, granted through the Commerce Clause Article 1, Section 8, Clause 3 of the U.S. Constitution. All businesses and Americans will be wise to dust off the document and demand that our political leaders follow it.

—By Dewardric McNeal, managing director and senior policy analyst at Longview Global, and a CNBC Contributor