Trade tensions between the United States and China have had a broad impact across the world, and the state of Wisconsin is no exception. Tariffs and unease are affecting Wisconsin trade, and producers of signature commodities are feeling the repercussions.
These issues were the topic of a panel discussion held on June 18, “U.S.–China Trade Tensions: What’s at Stake for Central Wisconsin’s Agriculture?” The event was hosted by the Wisconsin Institute for Public Policy and Service in collaboration with the Center for East Asian Studies at the University of Wisconsin–Madison.
The panel discussion, which was held at the UW Center for Civic Engagement in Wausau, was moderated by Pam Jahnke, Wisconsin Farm Report radio personality. Wisconsin agriculture experts and business leaders served as panelists for the discussion, including: Ian Coxhead, professor, UW–Madison Department of Agricultural and Applied Economics; Will Hsu, president, Hsu’s Ginseng; Brad Pfaff, secretary of the Wisconsin Department of Agriculture, Trade and Consumer Protection; and Don Radtke, board member, Wisconsin Farm Bureau.
Jahnke guided the panel through a variety of topics, including how trade tensions and tariffs affect relationships, profits, and the future of Wisconsin agriculture.
“What we’re talking about tonight is stripping away all of the headlines, all of the tweets, and all of the misconceptions people might have out there,” Jahnke said. “It is a story of people when it comes to this topic. It is not just the people being impacted. It is about relationships.”
Radtke commented that trade has been impacted throughout the years by policy decisions taking place on the international stage, but there has been a significant change for farmers during the last year in the wake of new trade tensions.
“I think what a lot of people don’t realize is how important that world trade is,” Radtke said. “What happens in Beijing affects us at our farm gate. We might not like it, but that’s part of it. The change of it is that we are losing those markets, and by losing those markets it is how long and what is it going to take until we get those back, and how long and what are we going to keep losing until we get those back?”
He also noted that Wisconsinites are also seeing a difference as they pay for items from China that have been impacted by tariffs, such as parts for milking equipment, necessary for operations. That cost is passed down from the dealers to the farmers, which diminishes profits.
Pfaff emphasized his strong confidence in the quality of Wisconsin’s agriculture industry to weather trade tensions, but said that there is a need to work with Washington legislators to find solutions so that trade can resume as normal.
“You can’t just turn on and turn off these markets,” Pfaff said. “These markets have been built long term. As Don stated, and has been stated by Will, it’s built upon relationships, cultural understanding, working with one another, and to just cut this off—is it going to come back? We want to do everything we can to make sure we can continue that relationship.”
Hsu, who is also a UW–Madison alumnus, offered his perspective as a business leader. As major consumers of ginseng, China is a significant market for his product, especially given that it is reputed to be of much higher quality than other ginseng on the market. He said that tariffs placed on Wisconsin Ginseng create an uneven playing field as it gives Chinese farmers a window to expand and capture more of the Chinese market. This also allows farmers in other countries to market their own products as high-quality Wisconsin Ginseng and sell at a lower margin.
Despite this trade occurring at an international level, it has ramifications for Hsu and the local communities in which he operates.
“I think it’s harder for ginseng, because ginseng is such an export-driven commodity,” Hsu said. “But you have to understand the impact it has on this local community. There’s over a million pounds of ginseng grown in Central Wisconsin. That brings in anywhere from $30–$50 million worth of economic value to farmers. That’s just directly to farmers. You’re not talking about the probably dozen or two dozen companies like ours that process the product, retails and resells it, and adds margin to it for domestic or foreign consumers. You multiply that effect by two or three times. Plus, we live here locally. We buy things locally, we buy farm equipment, we buy trucks, we buy chemicals, we buy land, we hire and employ people here locally, and so all of this has an economic impact here even though the product is being sold in China.”
The ways in which the trade situation could be resolved were also discussed, but an immediate end is not in sight. Instead, panelists such as Coxhead expressed cautious optimism for how trade tensions could play out.
“I think there’s a pretty good chance that the damage isn’t so severe yet that the markets won’t rebound, at least for products like agricultural products,” said Coxhead. “But you’ve got to recognize that there’s damage that could be long-term, and that is the kind of damage that affects relationships that make investment decisions, that decide on who to trade with, and the terms on which that trade is done”
The full discussion, including expanded responses from panelists, as well as audience member perspectives, is available at https://www.youtube.com/watch?v=-vkDNMfcJKA.
The event was part of the Center for East Asian Studies’ East Asia Now series, which is be held throughout Wisconsin.