WASHINGTON (Reuters) -U.S. President Donald Trump began his second term by signaling that talks with China to stop a deadly flow of fentanyl were fruitless and instead slapped 20% tariffs on Chinese goods to try to push Beijing to tackle trafficking of the synthetic opioid.

But last week, after meeting Chinese President Xi Jinping in South Korea, Trump agreed to slash his fentanyl-related tariffs on China in half in return for a fresh "consensus" on the drug, which U.S. Treasury Secretary Scott Bessent said would be hashed out via a new bilateral working group.

The deal revives a communications channel embraced by China, but long derided by Republican lawmakers, who argue that Beijing floats such working groups as concessions in high-level talks and then mires the U.S. in protracted negotiations. 

It also signals a shift for Trump officials, who had insisted that punitive measures would remain in place until Beijing proved it was cracking down on its fentanyl supply chains.

"The administration has made significant compromises in its own position on China and counternarcotics by now accepting a commitment to launch a working group," said Henrietta Levin, who served as a director for China on President Joe Biden's National Security Council and is now a senior fellow at the Center for Strategic and International Studies.

Levin said such a working group could still yield results, but that China had successfully sold counternarcotics cooperation to the U.S. at least three times in the past decade under Trump and Biden. 

"You start to wonder how many times they can sell us exactly the same half-hearted commitment," she said.

Trump administration officials say this time the mechanism will be results-focused, not a forum for dialogue on fentanyl. 

'FORCE HIS HAND'

Chinese officials vehemently defend their record on fentanyl, a leading cause of U.S. overdose deaths, saying they have already taken extensive action to regulate certain precursor chemicals used to make the drug. They accuse Washington of using the issue as "blackmail."

China has revealed few details of its own on the fentanyl accord. Its Foreign Ministry readout of the Trump-Xi meeting made no mention of fentanyl, and its Commerce Ministry statement said only that the two sides had "reached consensus" on fentanyl counternarcotics cooperation. 

"The U.S. needs to take concrete actions to create necessary conditions for the cooperation," China's embassy in Washington told Reuters without mentioning the working group. It said China "remains open to continuing the cooperation."

The Biden-era U.S.-China counternarcotics working group rapidly disintegrated when Trump unfurled tariffs earlier this year. But it had been a target of Republican scorn. 

In 2023, then-Senator JD Vance - now Trump's vice president - joined other Republican lawmakers in lambasting the Biden administration for removing sanctions on China to lure it into fentanyl talks.

"President Xi will only respond to strength. We must force his hand and make it clear that sanctions will only be lifted after the CCP (Chinese Communist Party) stops the deadly production of fentanyl precursor chemicals," Vance and other lawmakers wrote to the Biden administration.

Biden officials insisted that China took incremental steps under the working group, but that it needed to do far more. 

The White House did not respond to Reuters' request for comment on the new working group, but it issued a statement on Saturday that said China "will stop the shipment of certain designated chemicals to North America and strictly control exports of certain other chemicals to all destinations in the world."  

U.S. Trade Representative Jamieson Greer told Fox Business News that the U.S. still maintained 10% tariffs on China over fentanyl. 

"We still have leverage on this point to make sure the Chinese follow through on their obligations," Greer said. 

Nonetheless, reimposing the tariffs could threaten the broader, uneasy trade truce reached by Trump and Xi, with any renewal in trade tensions calling into question a possible Trump visit to China in April. 

Michael Froman, president of the Council on Foreign Relations and a former U.S. Trade Representative, said in a newsletter that Trump's tariffs worked as a source of leverage, provided that China "actually adheres to the agreement this time."

"If not, I imagine those tariffs might go back up," he wrote.