By Jenny Leonard

Bloomberg News

The Trump administration is considering an executive order to crack down on shipments of fentanyl and counterfeit goods, according to people familiar with the matter, a move aimed in part at pressuring China to help the U.S. combat its opioid epidemic.

The draft order would target foreign shippers routing deliveries through the U.S. Postal Service — not the two-largest U.S. couriers United Parcel Service Inc. and FedEx Corp., according to the people, who spoke on the condition of anonymity. One person familiar with the proposal said that China is a focus for the action, though the presidential order is not limited to that nation.

Washington has criticized Beijing for not doing enough to curb the flow of fentanyl, a highly addictive painkiller that’s played a role in the opioid epidemic blamed for thousands of deaths in the U.S.

President Donald Trump has linked the issue to trade talks, citing President Xi Jinping’s failure to stop the smuggling of China-made fentanyl as a reason for hiking tariffs earlier this month on Chinese goods.

Trump said Xi agreed, as part of a December 2018 temporary trade truce, to designate fentanyl as a controlled substance — a move that would expose its sellers to the maximum penalty under Chinese law. Since then, Trump repeatedly said Xi broke his word.

China has pushed back, arguing that the epidemic is because of the U.S.’s own lax regulation over the prescription of opioids to patients.

“I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE all deliveries of Fentanyl from China (or anywhere else!). Fentanyl kills 100,000 Americans a year. President Xi said this would stop — it didn’t,” Trump said on Aug. 23 in a series of tweets, in which he also announced more tariffs and ordered American companies to immediately start looking for alternatives to China.

The order, expected in coming months, will allow the U.S. Postal Service to stop doing business with foreign entities that are found to be shipping illegal goods or substances, the people said. Initially, an entity found in violation would be placed on a shame list. If the illegal shipments continue to come in after a 90-day period, the entity would be barred from delivering to the U.S., they said.

While Trump mentioned private carriers like FedEx and UPS in his August tweet, two of the people said the plan is to hit foreign entities. Agencies like state-owned China Post, for instance, could face heightened scrutiny, they said.

The White House declined to comment.

USTR this year again placed China on its priority watchlist in an annual report that details other countries’ intellectual-property practices. China continues to be the world’s leading source of counterfeit goods, according to the April report.

“Right holders report that online sellers of counterfeit goods often advertise that orders will be fulfilled via China Post’s express mail service and exploit the high volume of packages to the United States to escape enforcement,” the report said.

Trump trade adviser Peter Navarro, who is leading the effort on the executive order, often refers to the sale of fentanyl as one of what he calls China’s “seven deadly sins.” People briefed on the order said it’s likely China would retaliate against the U.S. move.

Beijing in recent weeks hit back at the U.S.’s claim that it wasn’t doing enough to curtail the production and sale of fentanyl.

In a document circulated by the Chinese embassy in Washington on Sept. 2, Beijing said its enhanced law enforcement activity had led to a “notable” drop in the number of smuggling cases of fentanyl-like substances to the U.S.

“Given the fundamental importance of preventing drug abuse in addressing the fentanyl issue in the U.S., China looks forward to stronger domestic regulation on the U.S. side,” according to the paper.

FedEx has been caught up in its own troubles in China. The Tennessee-based company has been under scrutiny in recent months after Huawei Technologies Co. said documents it asked to be shipped from Japan to China were diverted to the U.S. instead without authorization. In another incident, FedEx said it mistakenly rejected a package containing a Huawei phone being sent to the U.S. from the U.K., a claim China rebuffed.