NewsLocal News


Sen. Ron Johnson talks tariffs with Wisconsin business owners

Posted at 5:22 PM, Jul 16, 2018
and last updated 2018-07-16 18:22:24-04

Sen. Ron Johnson met with more than a dozen business owners from across the state to discuss the impacts of new tariffs. 

"In total, we're looking at between $8 and 11 million in cost increases," one business owner said. 

"Our customers will end up paying over $6 million more," another said. "This is costing us a fortune," Yet another business owner said. "For us, it's about a million dollars a month of impact."

President Donald Trump has placed higher tariffs on goods this year, which has lead to some countries, like China, increasing their own tariffs on American goods. 

"Like any war, I'm concerned it could spin out of control," Johnson said. 

Johnson spoke with some 15 business owners from across the state about how these new tariffs and retaliatory tariffs have impacted them. It's already increased costs 15 percent or more in some cases.

"The damage being done, much of it is permanent," Johnson said. "These contracts could be lost. A lot of these supply chains take a long time to develop. A lot of these customers take a long time as well.

They'll switch suppliers and we won't get them back for a decade or more."

The increased tariffs were aimed to make the United States more competitive in global trade. However, it's doing quite the opposite right now.

"They say there's going to be short-term pain for long-term gain," Johnson said. "Fine. But they need to understand, some of this damage is going to be permanent and it's going to be significant."

"We already had one customer cancel an order," Will Hsu with Hsu's Ginseng Enterprises Inc. said. "It was a 20-foot container with about 10 to 11 thousand pounds [of ginseng]. So about a half million dollars worth of product that was supposed to go out."

Hsu says Wisconsin is one of the top ginseng producers in the world. People from all over the globe seek out Wisconsin ginseng for its quality. However, with most of its consumers living in China, the tariffs aren't worth the quality.

"The consumer hasn't felt it quite yet because they're going into place right now," Hsu said. "Our assumption is if the price of ginseng or other products made in the USA or are grown in the US are higher, Chinese consumers will probably buy less or fewer of them. Not only do you lose the farming, you lose the expertise and eventually, you lose the market."

Decisions made on the ginseng crop now will be felt three to five years from now when the crop is ready to be sold. So with tempered expectations because of the new tariffs, this could have long-lasting impacts on one of the largest exporters of ginseng in Wisconsin. 

"When the price is higher, at a certain point, you can't afford it or you say it's not worth it," Hsu said. "It's hard as a farmer, but you understand it. As a business person, you understand it but as a farmer it's hard. It's the economics of the game we're playing."

But it won't just hurt business. 

"In the end, trade wars hurt consumers," Johnson said. "I can't point this out enough. Tariff is another word for tax. It's a tax on consumer products. This is a global economy. We don't have the luxury of choosing whether we want to compete. We have to compete and we can compete very effectively as long as we have good policies and we have a level playing field. In many respects, President Trump is right. We don't have a level playing field. We have to insist on one. But we also need to be very concerned with the approach this administration is taking when it comes to these widespread tariffs and being at war with literally all of our trading partners as opposed to uniting with the rest of the trading world against the primary which is China."

Johnson says he's collected statements from the businesses and will be sharing them with the president to show the impacts the tariff increases are already having.