WAUSAU, Wisconsin (Reuters) -The cool woodlands of central Wisconsin boast soils packed with Ice Age mineral deposits that make the area perfect for the cultivation of ginseng, a medicinal root that has been exported to Asia for more than 300 years.

Sliced and used in tea or ground into capsules, ginseng root is touted as an energy- and immunity-booster that can also reduce stress and improve memory. The bulk of the harvest is dried and shipped to China. 

Nearly all U.S. ginseng is produced in Marathon County, Wisconsin, where growers say the soil and climate produce top-quality roots with a distinct flavor, just as the "terroir" of specific wine regions affects the taste of grapes. Central Wisconsin, known as the "Napa Valley of American ginseng," produces crops that fetch premium prices in global markets.

But now, U.S. trade tensions with Beijing, a sluggish Chinese economy and strong competition from cheaper Canadian supplies are squeezing the niche industry that generated $14.7 million in U.S. exports to China in 2024, according to Chinese customs data.

"It's not profitable anymore," said Joe Heil of Heil Ginseng Enterprises, a 30-year veteran of ginseng farming. A generation ago, Wisconsin had 1,400 growers, Heil said, while now the number is fewer than 70. 

Costs for labor, fertilizer and other inputs "are through the roof, so we're not surviving," Heil said. "We're just kind of slipping away." 

TRADE WARS POSE NEW PROBLEMS

Trade wars have compounded problems for ginseng producers, sparking an escalation in retaliatory tariffs between the U.S. and top buyer China before the two countries struck a temporary truce in May. Hostilities resumed this month with renewed threats over rare earths ahead of a planned meeting between U.S. President Donald Trump and Chinese President Xi Jinping.

The volatile moves have rattled Wisconsin's ginseng growers and complicated business planning for a small industry based on finicky plants that need three to four years to produce marketable roots.

"It's made making rational decisions hard because you don't know what you are supposed to be doing," said Nick Sandquist, general manager at Hsu's Ginseng Enterprises. 

Some ginseng operations, including Hsu's, have been relying on diversified income streams while the trade war plays out. Hsu's operates a garden supply division while Joe Heil, a fourth-generation farmer, has expanded into growing hemp and hemp-derived cannabidiol (CBD) products.

COMPETITION FROM CANADA

Wisconsin growers' struggles pre-date the latest trade war salvos. Ginseng farmers have been operating below the cost of production for about five years, Sandquist estimated, although break-even prices vary among farms. 

One issue has been the abundance of cheaper ginseng grown in Canada, growers said. China imported nearly 3,000 metric tons of Canadian ginseng in 2024, at an average price of about $15 per kilogram, Chinese customs data showed, compared to 213 tons of U.S. ginseng priced on average near $69 per kilogram.

Wisconsin ginseng's quality is different from the Canadian supplies grown primarily in Ontario, south of Toronto, in sandier soils.  

"That two degrees of latitude difference, plus the geology, impact taste and flavor," said Will Hsu, president of Hsu's Ginseng Enterprises.

BOOM YEARS

Wisconsin's ginseng exports boomed in the 1990s and 2000s as China's economy surged. Beijing joined the World Trade Organization in 2001, relaxing tariffs on imports.

However, trade in the medicinal root dates back centuries. 

In the early 1700s, as over-harvesting restricted supplies of wild Asian ginseng, French missionaries learned of a similar ginseng species, familiar to indigenous tribes, that grew naturally in Quebec and much of eastern North America.

In 1784, the first merchant ship bound for China from the newly independent United States departed New York bearing furs and 30 tons of American ginseng.

Will Hsu's father, Paul Hsu, started his farm and garden business in 1974. Today, Will Hsu oversees the operation based in Wausau, Wisconsin, where operators answer the phone speaking Mandarin and English, and the website is accessible in both languages.

WAITING OUT THE TRADE WAR

The current trade tensions have stalled demand for Wisconsin ginseng, forcing growers like Joe Heil and Will Hsu to pack up their dried ginseng roots and try to wait out the crisis.

Hundreds of cardboard boxes of dried ginseng root, were stacked six rows high on wooden pallets in the center of the Hsu Ginseng Enterprises warehouse during an August visit. Some will be shipped to domestic customers for the Christmas and Lunar New Year holidays, while the rest awaits demand from customers in China.

"Shipping is taking longer, selling it is taking longer. It's just taking longer for us to convert the crop into cash," Hsu said.