Trump urged to press Xi on Chinese money laundering tied to Mexican fentanyl cartels

Congressional hearing witnesses encourage US president to tackle alleged fentanyl supply chain crisis linked to Chinese money laundering3-MIN READ3-MIN0ListenPublished: 4:59am, 10 Jun 2026Updated: 5:47am, 10 Jun 2026Chinese money laundering networks were accused of being “financial fuel” for the Mexican cartels at a congressional hearing on Tuesday, where witnesses urged US President Donald Trump to prioritise the issue at his next face-to-face meeting with Chinese counterpart Xi Jinping.“I want to be very clear, Chinese money laundering networks have become the financial fuel for cartels to poison Americans and threaten our borders, we’re seeing a Silk Road of crime across the Americas,” said Leland Lazarus, founder and chief executive officer at Lazarus Consulting and a former US diplomat, who testified at the hearing.According to the United States’ Financial Crimes Enforcement Network, between 2020 and 2024, around US$312 billion in suspicious activity was associated with cartel-linked Chinese money laundering activity, noted Dan Meuser, chairman of the House Financial Services Subcommittee on Oversight and Investigations.“More concerning, that figure likely represents only a fraction of the true scale, given it only captures suspicious activity that was detected and reported,” added Meuser, a Republican from Pennsylvania. “These networks are also key to the cartel’s procurement of precursor chemicals that produce fentanyl.”The Chinese embassy in Washington said it has signed, ratified and implemented UN conventions to fight money laundering and counter terrorism financing.“The drug problem in the United States is not caused by China,” although Beijing has tried to help, said embassy spokesman Liu Pengyu. “It is hoped that the US side will value China’s goodwill, view the results of this cooperation objectively and advance collaboration in law enforcement.”11:28Unravelling China’s role in the US fentanyl crisisThe hearing titled Converging Criminal Enterprises: Chinese money laundering Networks and Cartel Financing in the US Financial System comes amid the ongoing fentanyl crisis in America, which has killed thousands.Washington has previously characterised China as the primary source of precursor chemicals used to manufacture the drug, with Beijing feeling unfairly targeted over the crisis.Under the second Trump administration, the US has dialled up pressure on China to crack down on fentanyl, precursor ingredients and related money laundering tied to shipments that come into America, often through Mexico.Trump imposed tariffs on Chinese goods to pressure Beijing over the fentanyl issue, before such measures were ruled to be unlawful by the Supreme Court.Further ReadingChinese money laundering networks have become “the bankers’ cartel for poisoning our communities, including over 40,000 shell companies” that are operating in the US today, said Zach Nunn, a Republican lawmaker from Iowa, at the hearing.SCMP Plus is a new premium news platform that gives you an all-inclusive edge to stay ahead on China news. To access our exclusive content you’ll need to subscribe.Already a subscriber?LOG IN“Every dollar that is laundered buys more fentanyl, more guns, more product, and it’s moving directly into our country.”Fentanyl has been high on the agenda during the two meetings between Trump and Xi, which have taken place since the American president returned to office.This year, following the two presidents’ meeting in Beijing, Washington released a statement that said the leaders talked about the need to do more to stem “the flow of fentanyl precursors” into America. Beijing did not mention fentanyl in its statement.The issues highlighted in the hearing need to be prioritised in the bilateral relationship between the US and China, Lazarus said, emphasising that he thinks Trump should raise it directly with Xi when the Chinese president visits him in September this year.US President Donald Trump signs an executive order designating fentanyl, a powerful synthetic opioid, as a weapon of mass destruction in the Oval Office of the White House in Washington on December 15, 2025. Photo: EPA“[The] Silk Road of crime should be treated with the same urgency as trade, tariffs, minerals, and artificial intelligence,” he added.The hearing comes amid recent charges of Chinese nationals in the US over money laundering cases. In May, the US Justice Department unsealed an indictment of two Chinese nationals on charges of conspiracy to launder money for drug cartels.Ruhuan Zhen and Hongce Wu, who remain at large, are alleged to have hidden the source of illegally obtained funds on behalf of criminal groups, including the infamous Sinaloa Cartel. The pair allegedly used mirror transfers, overseas bank accounts, encrypted apps and trade schemes to launder the cartels’ drug profits.In March, the Justice Department indicted six Chinese nationals and two pharmaceutical companies on charges that included drug trafficking, money laundering and terrorism-related offences, in a case which was tied to the fentanyl supply chain.Elsewhere in the hearing, Democrats aimed at domestic issues, arguing that Trump’s own policies are creating vulnerabilities, citing concerns about changes to cryptocurrency policy and Trump’s pardoning of Binance co-founder Zhao Changpeng following a prison sentence for failing to safeguard the crypto exchange against money laundering.“I appreciate my Republican colleagues for holding this hearing on foreign criminal threats to the American financial system, but it is a disservice to the American public to ignore the very same crimes when they are made in America,” said Al Green, a Democrat from Texas.