Following a month-long pause, President Trump last week reimposed tariffs on Canada and Mexico, only to pause many of them again two days later. Different reasons have been offered by the Trump Administration for the tariffs, but in recent days the President’s advisers have honed in on one reason in particular: Fentanyl is being shipped across our borders with Canada and Mexico, and tariffs are a stick to make them do something about it.
The Trump Administration is correct that fentanyl is exacting a heavy toll on the United States. In the 12 months ending August 2024, over 58,000 Americans died of a drug overdose involving fentanyl, 65 percent of all drug overdose deaths in the United States during that 12-month period. If we were to apply the Department of Transportation’s $13.2 million value per statistical life, the fentanyl death toll represents a $770 billion loss per year, or 2.6 percent of the United States’ gross domestic product.
However, there are major problems with the argument that the United States should impose tariffs on Canada and Mexico to prevent Americans from dying of fentanyl.
First, fentanyl deaths are already plummeting, as reported in Figure 1. Between May 2023—the peak for fentanyl deaths—and August 2024, drug overdose deaths involving fentanyl fell by 51 percent. The 2024 data are provisional and continued processing of death certificates may somewhat increase the death toll in the most recent months, but it is worth noting that the downward trend in 2024 is a continuation of the 2023 decline, suggesting that the basic pattern may not change. What’s more, the decline in fentanyl deaths accounts for 94 percent of the decline in all drug overdose deaths over the same period.
Figure 1. Monthly drug overdose deaths in the United States, total and those involving fentanyl
Note: Dashed line in 2024 indicates provisional data. Drug overdose deaths are identified with the following ICD-10 codes for the underlying cause of death: X40-44, X60-64, X85, Y10-14. Because fentanyl does not have a unique ICD-10 code, the red line corresponding to drug overdose deaths involving fentanyl technically includes all drug overdose deaths which involved synthetic opioids except for methadone, a category dominated by fentanyl.
Fentanyl deaths were already declining at a fast pace before the fentanyl-driven tariff threats against Canada and Mexico. It is hard to justify threats against neighboring countries, especially a close ally like Canada, over a problem that has already been getting better so quickly.
Another problem with the argument that the United States should impose tariffs on both of our neighbors over fentanyl is that the United States seizes over 500 times more fentanyl on the border with Mexico than it does on the border with Canada (see Figure 2). If Canada is the source of less than 0.2 percent of the problem, then any action they take to stem fentanyl flows into the United States will have almost no effect on reducing overdose deaths.
Figure 2. Pounds of fentanyl seized at the southern and northern border of the United States, fiscal year 2024
That still leaves open the possibility of levying tariffs on Mexico to combat the far greater supply of fentanyl that comes across the southern border. At least in theory it could be possible to reduce fentanyl deaths even more quickly than the rapid decline we have seen since the summer of 2023. However, it is hard to seriously argue that fentanyl is the reason for tariffs on Mexico, when fentanyl is clearly not the actual reason for the same tariffs levied on Canada. There’s also the risk that Mexico, if antagonized, could pull back its existing cooperative efforts with the United States to combat the scourge of drugs and criminal activity that ultimately affects both countries.
There are other problems with using tariffs to fight the drug war. The full set of tariffs levied last week—and paused two days later—evaded the spirit of the free trade agreement between the United States, Mexico and Canada. Tariffs can harm American consumers and exporters. And higher tariffs could inadvertently make fentanyl relatively cheaper to drug abusers, due to appreciation of the dollar and an inability to place tariffs on illicitly supplied fentanyl.
The Trump Administration is right to shine a light on the rapidly declining but still massive fentanyl problem in the United States. Unfortunately, the administration appears to be more focused on waging a trade war than winning the war against drugs.
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