U.S. ginseng growers and animal breeders rely on exports to China. Now they wait on a trade deal

From Harvest Public Media:

In a warehouse north of Wausau, Wisconsin, thousands of cardboard boxes full of dried ginseng are stacked and waiting at Hsu’s Ginseng Enterprises.

It’s one of the largest growers of the specialty crop in Wisconsin, where almost all U.S. ginseng is grown. Will Hsu, the company’s president, said there’s something special about the region’s soil and the climate, what the French call “terroir.”

“Customers over the last 100 some years have gotten used to this taste and flavor, probably no different than wine connoisseurs feel about Napa Valley or France,” he said.

American ginseng is a staple of Chinese medicine, offering a cooling or tonifying effect that contrasts the more fiery ginseng native to Asia. The slightly bitter, herbal-tasting roots are mostly sold dried, but can also be processed into powders and teas.

Hsu sells about half of his annual crop directly from the U.S., offering direct-to-consumer sales online, through duty-free shops at airports or through Chinese pharmacies and grocery stores.

The other half is exported to processors in Asia, mostly in mainland China, Taiwan and Hong Kong. But these sales have largely been put on hold this year due to the back and forth exchange of retaliatory tariffs started shortly after President Donald Trump took office.

The return of trade tensions between the U.S. and China is a challenge across the agriculture industry, including major crops like soybeans and beef. But many specialty crop producers rely heavily on exports to China, and have fewer market options when those sales are jeopardized by retaliatory tariffs.

While other types of agricultural producers can try to shift sales to the domestic market or export to other countries, Hsu said ginseng producers don’t have that option. He’s still holding more than 80% of his crop from 2024.

“There is no other market in the world that will consume this much ginseng,” he said.

At the height of the most recent tariff exchange in April, China placed a 117% tariff on U.S. ginseng. But when the two countries agreed to a 90-day pause in May, the import tax fell back to the 32.5% that’s been in place since the end of the first Trump administration.

Hsu has encouraged his buyers to take advantage of the current pause, especially one customer that’s already paid a deposit on a $1 million shipment. But some companies are holding out hope for a better import tax as a result of recent trade talks between the two countries. Trump announced in early June that a new trade agreement had been reached, but details of the deal have yet to be released.

“That’s the risk in this environment, when it’s changing: it could get better, but you have to think about the flip that it could get worse,” Hsu said. “And if it gets worse, how long are you going to let this product sit here?”

Some ag products have few alternative buyers

Ginseng is not the only crop that has few other options for their products.

The U.S. pork industry exports around 55% of pork offal, sometimes called pork variety meats, to China, according to the National Pork Producers Council. These are the internal organs of hogs, like the kidneys, liver and tongue, which are commonly used in Chinese dishes but are not a part of most American diets.

David Anderson, an ag economist at Texas A&M University, said prices for the pork byproducts dropped sharply in response to the tariff exchange between the U.S. and China in April. But the most recent market reports show the price has returned to the previous level thanks to the 90-day pause.

“I think It highlights that there is international demand, and that the tariffs do matter,” Anderson said.

He said exports of pork muscle cuts, items like loins and shoulders, have also rebounded during the tariff pause. But Anderson said the two categories are separate markets. Offals are generally sold at lower prices than muscle cuts, making them more popular in countries with lower incomes.

Opening new export markets for the specialty product is also a matter of taste.

“A lot of times culture matters,” he said. “Some places eat these items and some don’t.”

Anderson said the details of the new trade agreement between the U.S. and China will matter when it comes to specialty products like offals. He sees the price recovery during the tariff pause as a positive sign the market won’t face lasting impacts.

America’s competitors could get the upper hand

In Missouri’s capital Jefferson City, Tony Clayton has worked in livestock exports to China and more than 60 other countries over the last three decades. His company, Clayton Agri-Marketing, employs trucks, cargo planes and ocean freight vessels to transport live pigs, cattle and other animals for breeding.

“A lot of countries around the world see U.S. genetics as the gold standard,” Clayton said. “But every country is different, regardless of how we try to access that market.”

Much of the business is logistics and ensuring livestock meet each country’s animal health protocols for blood testing and isolation. Clayton said China has some of the most difficult protocols, including 60 days of blood testing prior to shipping pigs and a 45-day quarantine for the animals after they arrive in the country. He spends an estimated $400 per pig in blood testing alone.

But he said exports of breeding swine to China were strong before Trump returned to office. The country is working to rebuild its domestic industry after much of Asia was hit by African swine fever starting in late 2018.

Clayton had a shipment of nearly 900 pigs scheduled to fly to China in mid June. But that sale was quickly put on hold when tariffs ramped up in April. He’s now racing against the clock to get the swine shipped out before the end of the tariff pause in early August.

“You don’t slow biology down; the pigs still grow,” Clayton said. “We’re in a completely different set of animals than we had previously selected.”

The roller coaster of tariffs and pauses this spring has made it difficult for Clayton to plan future sales, not only to China but to countries around the world. He feels like America’s brand as a reliable seller has been tarnished in a way that won’t be easy to recover from.

“The damage is deep on this one,” he said. “There’s not a week that goes by that I don’t have three to four customers ask the question, ‘What’s happened to the United States?'”

Clayton said the on-and-off tariffs have also opened the door for competitors like Australia and the European Union to gain more market share. That’s not only true in China, but in other countries that have been hit by the Trump administration’s tariffs, such as Mexico.

It’s the same problem that Hsu sees in the ginseng market. Growers in Canada and China already sell their products at a lower price, and the added tariffs have made Wisconsin ginseng even less affordable for the average Chinese consumer.

“It’s very hard then to convince them to go back to something that is more expensive once they’ve swapped to a cheaper substitute,” he said.

Ginseng grows for three to five years before it’s harvested, making it difficult for Hsu to adjust his production to reflect the latest trade tensions. He made the hard decision to plant fewer acres this summer because he’s unsure what U.S.-China trade relations will look like by the time it’s harvested during the next presidential term.

This story was produced in partnership with Harvest Public Media, a collaboration of public media newsrooms in the Midwest and Great Plains. It reports on food systems, agriculture and rural issues.