Trump’s tariff threat throws a spotlight on the whack-a-mole trade in drug precursors

President-elect Donald Trump this week cited drugs as a reason for his threat of crushing U.S. tariffs on Canadian imports.

“This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” Trump wrote on his social media platform Truth Social.

Canadian politicians have correctly pointed out that Canada and fellow tariff victim Mexico have little in common when it comes to the flow of illegal drugs (or migrants).

But it’s also a fact that fentanyl production in Canada is booming as seizures at the border are dropping — which indicates that Canada has transformed from a buyer of fentanyl and methamphetamine into a significant producer and even exporter.

That domestic production depends on getting the ingredients into the country. Increasingly, as the drug industry moves into synthetics and away from dependence on plants like coca and poppies, efforts to counter drug trafficking are focusing on those ingredients and precursors.

Fentanyl deaths may have peaked

It’s possible that 2022 may be remembered as the worst of the fentanyl epidemic. Deaths in the U.S. from synthetic opioid overdoses, which started to rise sharply around 2014, appear to have peaked in that year and declined slightly in 2023.

Canada is also posting a slight decline in fatal drug overdoses, with about 21 deaths every day in the first three months of 2024, compared to 23 a day in the same period last year. (For comparison, about two Canadians per day die by homicide, and five die on the roads.)

But that sliver of good news cannot obscure the huge toll that fentanyl has taken on both countries.

Between 2016 and 2024, both countries lost about the same number of people to opioid toxicity that they lost in the Second World War — about 47,000 in Canada and about 400,000 in the U.S. As in war, fentanyl’s victims are typically young.

So it’s hardly surprising that fentanyl has become a political issue, and whether Trump’s allegations against Canada are true or not, it’s clearly in both countries’ interests to do something about fentanyl.

The economics of making fentanyl locally

The logic behind importing chemicals to manufacture fentanyl or meth — instead of producing them overseas and then importing the finished product — is not hard to understand.

China is the number-one source country for the chemicals used to make synthetic opioids. China executes people who make illegal fentanyl.

But that same Chinese government has long been willing to turn a blind eye to Chinese companies that sell chemicals others might use to make fentanyl elsewhere in the world. That fact has led the U.S. to sanction Chinese companies and individuals Washington accuses of profiting from the trade without facing consequences at home.

After sanctioning eight China-based chemical companies last year, the U.S. Department of Justice said the companies proved by their actions that they knew their products were being used for illicit purposes.

“(The eight companies) often attempt to evade law enforcement by using re-shippers in the United States, false return labels, false invoices, fraudulent postage, and packaging that conceals the true contents of the parcels and the identity of the distributors,” the department said in a media statement.

“In addition, these companies tend to use cryptocurrency transactions to conceal their identities and the location and movement of their funds.”

Superlabs sprout in Canada

The two biggest criminal syndicates involved in importing precursors into North America are the Sinaloa cartel and the Cartel Jalisco Nueva Generacion (CJNG).

They operate the sophisticated labs needed to turn precursors into finished opioids and methamphetamine, generating billions of dollars in the process.

But that production is not confined to Mexico. A recent RCMP bust in Falkland, B.C. unveiled a superlab production facility unlike any ever discovered before in Canada — one with the capacity to produce vast quantities of fentanyl and meth for export (although the RCMP reported that the drugs’ intended market was not the U.S.).

It was just the latest haul in a series of seizures by the B.C. RCMP of precursor chemicals.

There are also increasing signs of efforts by Mexican cartels to establish a foothold, and production facilities, in western Canada.

There’s nothing new about efforts to crack down on precursors. In fact, the main precursors of methamphetamine (1-phenyl-2-propanone [P2P] and methylamine) and of fentanyl (4-anilino-N-phenethylpiperidine [ANPP] and norfentanyl) are about as tightly regulated as the finished drugs themselves.

For that reason, the focus of law enforcement and regulators has shifted to “pre-precursors” that have been less regulated, such as the 4-Piperidone that is used to manufacture ANPP, which in turn is used to make fentanyl.

Both Canada and Mexico have taken steps against that substance.

In June, Canada put 4-piperidone, “its salts, derivatives and analogues and salts of derivatives and analogues,” into the Controlled Drugs and Substances Act as a controlled substance.

Mexican President Claudia Sheinbaum highlighted her own country’s anti-fentanyl efforts in a letter she wrote to Trump in response to his tariff threat.

“A constitutional reform is in the course of being approved by the legislative branch in my country that will declare the production, distribution and commercialization of fentanyl and other synthetic drugs to be a grave crime for which all access to bail is denied,” she wrote.

“Nonetheless, it is public knowledge that the chemical precursors enter Canada, the United States and Mexico in an illegal manner coming from Asian countries, which makes international collaboration imperative.”

A game of whack-a-mole

But part of the problem with controlling synthetics is that there are often alternatives available — and there’s always a precursor to the precursor.

Calvin Chrustie spent 32 years in the RCMP, many of them investigating transnational organized crime.

“One of the complexities that makes it very difficult for law enforcement, border people, is the shift and change in terms of the structures of some of these chemicals,” he told CBC News.

Sometimes, minor molecular alterations can be made to a banned substance that render it legal and unregulated.

“They design them so that law enforcement and others can’t seize because they don’t fit into certain schedules within our legal framework,” Chrustie said.

It’s not hard to ban 4-piperidone, a substance that has no important commercial application beyond the manufacture of fentanyl. But 4-piperidone itself can be made from other substances that are less tightly regulated.

And if those substances are regulated, the drug producers can simply move further back up the production chain until they get to pre-pre-precursors — substances that do have legitimate uses in industry and are therefore very difficult to regulate.

At a certain point, the effort to stop illicit drug manufacturing begins to interfere with legitimate commerce.

Many ways to skin a cat

Moreover, when one precursor is banned, another one is quickly found (or designed) to replace it.

Case in point: when the U.S. meth epidemic began, most meth was being synthesized domestically in small labs using the pseudoephedrine in cough medicine as a starting point. Meth producers hired addicts, known as “smurfs,” to tour drugstores buying up large quantities of cough syrup.

The U.S. government responded in 2005 with the Combat Methamphetamine Epidemic Act, banning over-the-counter sales of such medications.

But by then, Mexican drug cartels — already rich from cocaine, heroin and marijuana — had taken an interest in the meth market and sought to obtain pseudoephedrine on an industrial scale.

As governments worked to shut down that international trade around 2008, Mexican cartels simply moved their ephedrine trafficking routes to other countries such as Argentina.

By the time the ephedrine trade was being more effectively controlled, the cartels had found they didn’t need it any longer. They could make meth using the “P2P” method that starts with 1-phenyl-2-propanone.

By 2019, the Drug Enforcement Administration was reporting that over 99 per cent of all Mexican meth samples tested were produced using the P2P method.

There are, in fact, dozens of different ways to make methamphetamine, and the meth coming out of Mexico now is as pure as it has ever been — and cheaper than ever.

Follow the money

The effort to stop the international trade in drugs was not successful even when drugs depended on the cultivation of crops such as coca and poppy that could (theoretically) be sprayed or manually eradicated. Today, more land is devoted to coca cultivation than ever before.

But the challenge is much greater with synthetics, which offer no obvious choke point where authorities might be able to intervene and interrupt production. Chrustie said a strategy that focuses mainly on the ingredients of drugs is probably doomed to fail.

“I think it has to be a much more strategic, holistic approach,” he said. “And that includes, yes, looking at the precursors, looking where they come from. I would just say it’s one aspect.”

The key to dismantling networks that import precursors and manufacture drugs, he said, is to target the people and companies doing it, and the illicit finance that supports it.

“Focusing on the people, I think, is just as important as focusing on the product,” he said. “And probably even more important than the product, I think, is the finances of it.

“If we just focus on the precursors and not those two most important impact points in terms of disruption enforcement, if we can’t target the people because our legal framework in terms of our disclosure laws doesn’t allow us to collaborate and share information with our foreign partners, that’s a problem.”

Chrustie said legal businesses are often involved in the trade, and wittingly or unwittingly profit from it without facing severe consequences.

“Tackling it without the business community and the banks clamping down on businesses being used to facilitate and fund precursors to productions, and the people that are behind these networks,” is unlikely to produce the desired results, he said.