Trade War Threatens State’s Ginseng Growers
Trump hikes steel and aluminum tariffs, so China ups it on ginseng, a big state export.
Wisconsin Ginseng. Photo by Gary Stevens (CC BY 2.0).
Wisconsin exports a diverse array of agricultural products around the world. One high-profile item is ginseng, an herb that has been grown in parts of central Wisconsin for over a century.
In 2017, the state exported more products on the whole than the previous year, which means global economic shifts like President Donald Trump‘s escalating trade war with China could have an even greater impact on farmers and local economies around the state. When China’s government retaliated for Trump’s imposition of new steel and aluminum tariffs, it struck directly at the livelihoods of ginseng growers who depend heavily on the Chinese market, where Wisconsin ginseng has a distinctive reputation.
It already costs something to get that product into China, Ginseng Board of Wisconsin president Bob Kaldunski explained in an April 6, 2018 interview with Wisconsin Public Television’s Here & Now.
“The Chinese government does have a tariff on our ginseng coming in … it’s about 15 percent currently, and there’s also a 5 percent [value-added tax], and above that now we’re going to get another 15 percent,” he explained, laying out the overall ramifications of China’s new tariff on the root, which is often used as a medicinal herb.
Kaldunski said he worries about the distribution pipeline for ginseng slowing down, but isn’t ready to panic. It’s possible that Wisconsin ginseng’s reputation as a higher-end product, for which customers generally pay a premium, could prove a vulnerability in a trade war.
“We are concerned that the consumer will turn and look to a cheaper source of ginseng,” he said.
Ginseng’s century-long history in Wisconsin has yielded a product prized for its distinctively bittersweet flavor and made Wausau an unexpected hub of the global ginseng trade. The first International Wisconsin Ginseng Festival was held in downtown Wausau in September 2017, attracting Wisconsin ginseng farmers, Chinese importers and fans from around the world.
Vendors at the inaugural International Wisconsin Ginseng Festival, held in downtown Wausau on Sept. 16, 2017, sell a variety of products made with the root. Photo by Glen Moberg/WPR.
The root has been prominent in another high-profile international commerce issue in Wisconsin. As Taiwan-based electronics manufacturer Foxconn locked in a multi-billion dollar subsidy for its planned LCD screen factory in Wisconsin, CEO Terry Gou also courted the state’s ginseng growers with talk of new distribution channels and developing value-added products. Growers responded enthusiastically, with Kaldunski telling Here & Now in a Aug. 4, 2017 interview that the Ginseng Board of Wisconsin was hopeful about this prospect.
Circumstances have shifted over ensuing months. In his conversation with Here & Now in 2018, Kaldunski acknowledged that, for all that Wisconsin ginseng growers rely on exports, their overall presence on the global market is small compared to other products China is targeting. Among them are soybeans, one of the biggest cash crops in the United States. Relatively speaking, the $20 million export market for Wisconsin-grown ginseng doesn’t wield a lot of influence on the world stage, though it’s economically crucial to communities in the central part of the state.
It’s tough to predict the overall impact the Chinese tariffs will have. Ginseng grown in Wisconsin doesn’t go to market until November or December. Given the volatile Trump administration, and with unpredictable midterm elections coming up, a lot could change in 7 months.
Wisconsin Ginseng Growers Worry About Tapping Crucial Chinese Market was originally published on WisContext which produced the article in a partnership between Wisconsin Public Radio, Wisconsin Public Television and Cooperative Extension.
Well Wisconsin, You voted for Trump and Walker so I guess this is what you get. Just wondering, are the Chinese putting tariffs on cannabis? Nope! Cannabis farming and business is BOOMING out west, meanwhile in Wisconsin more and more farmers are going out of business, losing everything and even commiting suicide. It is awful and UNACCEPTABLE Wisconsin! The state should’ve voted Democrat and legalized a long time ago and we wouldn’t be in this disastrous mess. Diversification in an economy is good! Because now you are stuck with only ginseng, soybeans, pork and cranberries and ALL are getting nailed because of Trump’s dumbass trade war.
Dump Walker
Legalize cannabis
Yes, but they hate us liberals and the urban people more.
They have successfully have been conquered by the GOP.
Not up in Bayfield or Ashland counties they haven’t been, solid blue, year after year. Didn’t vote for Trump, Walker, Screnock or any other crooked republican schemer.
Dump Walker
That’s good. We need more rural folks to understand that union, non union, urban, white, black, male and female are under the are in the same economic and in case worse shape than any Republican or their rich corporate and wealthy constituents.
There tax dollars are corporate handouts, welfare for the rich.
Yes! We’ve been here since the beginning. I worked on organic farms and in co-ops in Eau Claire 30 years ago, way before it was “cool” or “farm to table” existed. 🙂 Ashland and Bayfield counties are cool as hell and progressive. We don’t fall for Walker, Trump or other Rwpublican’s lies and scams. Come on, it’s the home of Northland college! Come on up to the Apostles and go sailing with us sometime.
Dump Walker
I remember the Haizhu Market in Guanghou, China, the largest market in southern China. The market was either outdoors along sidewalks or under a corrugated tin roof. The one exception was the ginseng market. This area was closed off by glass doors. Inside were boxes of ginseng being sold at very high prices. In China ginseng is used primarily for male libido, it is the Viagra for the wealthy. I am surprised the article did not mention this is the main use of the product. I doubt if any tariff would hurt the sales.
But the trariff will hurt profits. The margin will shrink for farmers.