thanks very much. >> Thank you.
>> 1 farm crop in Wisconsin is being hit especially hard by new
retaliatory tariffs from China. Ginseng Wisconsin produces over
95% of the medicinal plant that's grown in the U.S, and
it's exported to customers in China. Our next guest is one of
the largest exporters of ginseng to Asia. From his farm in
Marathon County. But now with Chinese tariffs doubling the
market for his prized product is withering. Will Hsu is visiting
his markets in Asia, and he joins us from China. Thanks very
much for being here. >> Thank you for inviting me
today. achieve on your visit there?
>> Primarily, we're here to check on the market conditions
in light of all the news, the talks about tariffs and the
changes in the world economy, but also to reassure our
customers and clients that, you know, we're still trying to
service them as best as possible despite some of these headwinds.
>> Are you wanting to convince Chinese customers that the extra
cost of your ginseng with the tariffs is worth it?
>> It's a little bit of that, I think, but it's also part of my
trip. Prior to coming to China, was also looking at other export
markets. Given how dependent our industry is on the Chinese
consumer, the two stops I had prior to China were Singapore
and Malaysia, which do have a number of ethnic customers.
Ethnic Chinese customers, but not nearly the size of the
market of China. >> So you said that you reliving
a nightmare with these latest tariffs. How so?
>> Well, the first round of the trade war that was announced in
2018 took the tariff on our product from 7.5% to 32.5% with
the multiple rounds announced over the last two weeks, since
April 2nd. We are now at 117% tariff. And so it's reliving a
nightmare in the fact that every day you wake up and it's another
round of tariffs and it's another round of calls from
customers who are concerned, we're getting customers who are
delaying or canceling orders. Very similar to the pattern that
we saw in 2018 and 2019. During the first round of this trade
war. >> And so what has that done to
production of ginseng in Wisconsin?
Wisconsin has actually remained fairly stable over the last 5 or
6 years since the since the start of the first trade war.
Unfortunately, what has happened during that time, though, is the
price per pound has declined. And so about 6 or 7 years ago,
the price for ginseng off of the farm was probably closer to 50
to $60 a pound. Today, it's roughly half of that, about 25
to $30 a pound. And with the current or the most recently
announced tariffs, our expectation is that our
customers and they actually have been asking us to take price
reductions in order to offset the tariff that they're paying
to. The Chinese government. >> Is all of that sustainable?
>> It's not. We're currently at prices that are at or below our
cost of production. We have rising labor costs. We have
inflation in our input commodities. You know, things
like chemicals and fertilizer, even land prices are obviously
up as well. And so when you add all of those inflationary
elements into our production, and then you have customers on
the opposite side or consumers on the opposite side who don't
want to pay more for the product. Just like many
Americans don't want to pay more for our groceries. Chinese
consumers don't want to pay more for their ginseng. And so
they're asking the farmers who grow jinxi in Wisconsin to
consider taking a price reduction to offset the tariffs
so that the prices don't have to be increased to them, whether
that's possible or feasible or not will really depend on the
market conditions and whether farmers are forced to sell their
crop. We have a significant number of farmers who have not
sold their crop from 2024, and so it's a very real possibility
that if not this year, this fall's crop in 2020 5th May have
to see some changes made, either to the amount of production or
to the price. >> Do you think this is a
product and market that U.S. Trade representatives understan?
>> I think we've done a good job of explaining the impact to the
central Wisconsin economy, in particular, Marathon County. If
we don't have a crop and jinxing farmers, but I do believe the
way that tariffs have been rolled out in both phases of
this trade war, during Trump's first administration and now
during the second one, is it's a blanket statement. It's not
targeted. It's not necessarily pointed at specific industries.
You know, there are some specific industries that may be
getting additional tariffs, such as steel, aluminum, some of the
technology sectors. But when you're talking about broad
swaths of tariffs being rolled out across the board in equal in
equal measure, it's not really targeted. And so I think that's
what makes this difficult for many of us used to dealing with
a changing global environment is it might be one or 2 or 3 items
here. It's across the board. >> Will Hsu we wish you well and
we wish you luck on on your visit there and on your crop
back here at home. Thank you so back here at home. Thank you so