As China prepares new tariffs, Wisconsin ginseng farmers already feeling the effects
As China prepares to hit the United States with additional tariffs, Wisconsin ginseng farmers are already feeling the effects.
As China prepares new tariffs, Wisconsin ginseng farmers already feeling the effects As China prepares to hit the United States with additional tariffs, Wisconsin ginseng farmers are already feeling the effects. Check out this story on htrnews.com: https://jsonl.in/2J8qSZ4
Max Bayer, Milwaukee Journal Sentinel Published 11:36 a.m. CT July 9, 2018 | Updated 10:25 p.m. CT July 9, 2018
Ginseng is a major export from Wisconsin, particularly to China.(Photo: Mark Hoffman)
MADISON - After the U.S. officially launched $34 billion in new tariffs last Friday, China announced it would hit back with more duties of its own.
Although the country has yet to announce which U.S. goods will be targeted, Wisconsin ginseng farmers are already reeling from a 15 percent tariff levied by China three months ago.
"Tariffs don't do anybody any good," said Craig Baumann, whose family runs a 500-acre ginseng farm in Wausau. "We had one brand new customer lined up and (a) signed contract and everything, and they walked away from it the day that 15 percent tariff went on."
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Wisconsin is the country's leading exporter of ginseng, and farmers in Marathon County, where production of the crop dominates, are worried about how the tariffs will affect business in the coming year. Farmers are finding that they are having to discount their crop to keep customers.
Baumann said the discount will cost farmers the revenue needed to purchase new equipment and hopes a resolution is made before the new market for ginseng begins in September.
For now, Baumann said he'll continue to travel to China to communicate directly with his customers.
"It's frustrating," Baumann said, adding that before the tariffs, business was good and stable. He said ginseng was a commodity bringing a lot of money back into the U.S.
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The stability prior to the tariffs that Baumann references is clear in the data.
In 2017, Wisconsin exported $14 million of ginseng to China alone, almost $7.5 million more than the second largest exporter, New York. That was more than a 16 percent increase for the state from 2016 to 2017.
Additionally, China is the largest beneficiary of Wisconsin's ginseng followed by Hong Kong, Taiwan and Canada. China's consumption of U.S. ginseng grew more than 45 percent from 2016 to 2017, totaling almost $23 million worth.
The U.S. is one of only four ginseng producers in the world, joined by Canada, China and North Korea.
RELATED: $20 million, 590,000 pounds, 4 countries: Ginseng in Marathon County, by the numbers
Mark Maley, spokesman for the Wisconsin Economic Development Corp., said the agency doesn't want to get involved in federal policies.
"Our strategy isn't going to shift because of tariffs," he said, adding that he wants to give producers "as many opportunities as we can overseas."
Will Hsu, vice president of operation for Hsu Ginseng Enterprises in Wausau, said he expects Wisconsin and the U.S. to be less competitive on price because of the tariffs. He said Wisconsin has historically charged more for its ginseng because of its quality compared with that of Canada and China.
Politically, Hsu acknowledged that the Chinese tariffs were likely targeting industries located in areas that have helped GOP President Donald Trump.
"If you want to punch back at a Republican administration, the easiest way to do that is to go after their base," he said.
Hsu believes that Gov. Scott Walker, who has expressed concern with the tariffs, is empathetic to the issues of farmers but that his focus may be in other sectors, such as manufacturing.
Hsu added, "(Walker) doesn't represent the largest agricultural interest in the country."
Baumann fears that as the tariffs continue, it will be the larger agricultural industries that have the money for powerful lobbyists, like the soybean and pork industries, that end up seeing reforms.
As for ginseng?
"We might get left behind," he said.
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