Ginseng farmers fret over possible levy

Wisconsin's ginseng growers are apprehensive about their product showing up on a list of targets if China retaliates against US tariffs.

US President Donald Trump, after imposing tariffs of 25 percent on imported steel and 10 percent on aluminum on March 8, signed a memorandum last Thursday that would impose tariffs on up to $60 billion of imported Chinese goods.

In response, China's Ministry of Commerce on Friday released a list of 128 US goods that it would impose duties on, barring an agreement between the two countries. That would potentially include a 15 percent duty on ginseng.

"I don't see the benefit in tariffs. We are just a little industry here that would get roped into the whole thing," said ginseng farmer Jim Schumacher. "Any time you add a 15 percent duty or tariff, that is definitely concerning - even if you have the highest-quality ginseng. You aren't price-competitive then."

The Schumacher family's 60-year-old company - Schumacher Ginseng LLC - is in Marathon County, Wisconsin, where the majority of the state's ginseng is grown.

The company produces American ginseng and distributes it as roots, tea, capsules and other products at home and abroad.

China is the most important market for Wisconsin ginseng. In 2017, more than 85 percent of the state's yield was exported to China or brought into China as gifts, according to the Ginseng Board of Wisconsin, a nonprofit organization representing all of the state's ginseng growers.

The exports to China are worth $30 million a year to Wisconsin's growers. There are approximately 180 ginseng farmers in Wisconsin, and the state's American ginseng is considered the highest quality in the world, according to the board.

The ginseng board is also concerned that China might find other markets.

"This (15 percent) duty could be detrimental to our industry, as many Chinese distributors have expressed concern that they may have to shift purchases to Canadian ginseng," the board said.

Canada is the largest producer of American ginseng in the world. The majority of production is in Ontario and British Columbia.

Board President Robert Kaldunsk, who has grown ginseng for 36 years, was in China last week meeting with new potential distributors when news broke of China's retaliatory measures.

He said a consultant for the group told him Chinese consumers were talking about cutting back on or not purchasing Wisconsin ginseng because they felt their country was being punished by US tariffs.

"We would lose well beyond 15 percent (in revenue) because the marketplace would be quieter. ... We don't have margins that can absorb that kind of loss."