One farm crop in Wisconsin is
being hit especially hard by
new retaliatory tariffs from
China, ginseng.
Wisconsin produces over 95 percent
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 ginsing to Asia from
his farm in Marathon County.
But now with Chinese tariffs
doubling, the market for his
prized product is withering.
Will Xu is visiting his markets
in Asia, and he joins us from
China. Thanks very much for being
here.
Thank you for inviting me today.
So what are you hoping to achieve
on your visit there?
What are your thoughts
on the market conditions and
the changes
in the world economy?
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're 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 percent 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 is another
round of calls from customers who
are concerned.
We're getting customers who're
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?
So production of ginseng in
Wisconsin has actually remained
fairly stable over the last
five or six years 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 six or seven
years ago the price for ginsing
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, 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 sides who
don't want to pay more for the
product, just like many to
pay more for our groceries,
Chinese consumers don't want to pay
more for the jinxing.
And so they're asking the farmers
who grow jinx 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 2025 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 understand?
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 jinxing
crop and jinx and 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 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
two or three items here.
It's across the border.
Wilshu, we wish you
well and we wish you luck on
your visit there and on your
crop back here at home.
Thank you so much.
Thank you for having me.
Wow, thank you.
This is, it's devastating.
We'd like to continue to
check in with you,
not to, you know, feel
your pain, but to understand the
market.
Well, to get the message out,
because I do think targeted
tariffs make a lot of sense on
certain industries, but across the
board to say everything's going to,
the way China has done it is also
equally unfair, but they've done it
in response to the U.S.
So you can decide who's to blame.
Yeah, yes.
Well, thank you.
When do you return?
I'll come back next week.
Well again, thank you so much for
making yourself available.
Appreciate it.
Thank you for your time.
Have a good day.