US' ginseng industry faces tariff pressure

The market for American ginseng and other US agricultural products remains uncertain amid continuing tariff pressures.

In early March, China introduced additional tariffs on approximately $22 billion worth of US goods, including agricultural exports, in response to the latest escalation of the trade tensions triggered by the Donald Trump administration.

Michael Jiang, president of Marathon Ginseng in Wisconsin, described the situation as precarious.

"We were lucky to escape this time. Hopefully, there won't be any more tariff increases," Jiang told China Daily after attending the Natural Products Expo West in Anaheim, California, in early March.

The state of Wisconsin, whose climate, soil and topography create ideal conditions for growing the root crop, accounts for 95 percent of American ginseng production.

The American ginseng sector has been burdened since 2018, when the first Trump administration imposed tariffs on Chinese ginseng imports to the US.

As a countermeasure, China levied a 15 percent tariff on American ginseng, along with other agricultural commodities, as part of a broader response to US President Donald Trump's escalating tariffs — which targeted at least $200 billion in Chinese goods.

Despite the later US-China negotiations that allowed businesses to apply for a 10 percent tariff reduction, and the US government providing subsidies to farmers, the actions were insufficient to counteract the damage caused by the tariffs, according to Jiang.

"It's not much help to farmers," Jiang said, noting the cost of exporting American ginseng to China still rose by 40 percent.

American ginseng holds deep historical significance in US-China trade. In 1784, the Empress of China, the first international trade vessel to sail under the US flag, carried over 30 metric tons of ginseng to China, marking the beginning of commerce between the two nations.

"Therefore, it holds symbolic significance," Jiang said.

China remains a crucial market for American ginseng. In 2023, the United States exported approximately 561,860 kilograms of ginseng roots globally, with a significant portion destined for China and East Asia. Over 95 percent of wild ginseng harvested in the country has been exported to China.

Medicinal properties

Chinese consumers highly value American ginseng (Panax quinquefolius) for its perceived medicinal properties. However, with the imposition of tariffs, many Chinese buyers have turned to Canadian ginseng due to significant price differences.

The ginseng industry in Wisconsin has experienced a decline, with fewer than 600 hectares under cultivation in 2024. The number of family farms has decreased, with many no longer engaging in ginseng farming.

Trump has imposed additional tariffs on Chinese imports this year, including a 10 percent tariff effective Feb 4, followed by another 10 percent increase on March 4.

Alan Qi, president of FH Ginseng, highlighted the broader effects of increasing tariffs on consumers.

"If tariffs increase, both Chinese and American consumers will be greatly affected, and ultimately, consumers will pay the bill," he said.

Qi recalled the effect of Trump's previous tariffs on the ginseng trade: "Our American ginseng sales were greatly impacted because both sides increased tariffs. American ginseng sold to China, and Chinese red ginseng sold to the US both faced challenges since then."

Soybeans, the largest US agricultural export to China, valued at $12 billion last year, now face an additional 10 percent duty. Pork, beef, and seafood have been similarly affected, while cotton, chicken and corn are subject to 15 percent tariffs.

With the vast majority of US agricultural exports to China now subject to additional tariffs, US farmers are facing mounting difficulties in maintaining their competitiveness in the Chinese market, experts have said.