(No new price increases, just sharing an update)
The past year has been exceptionally challenging for the field of Chinese medicine in the US. Suppliers are contending with unprecedented tariffs while trying to minimize their impact on customers. Practitioners are paying more for herbs and acupuncture needles; patients are struggling with the rising cost of healthcare and household essentials. Never has it been more important for us to stick together, support each other, and break down the facts.
While practitioners have been seeing the effects of the tariffs for months, few follow the constantly changing details. This blog aims to clarify the current situation.
Currently, prices are reasonably stable for Chinese herbs in America. While prices are higher than they were a year ago, tariff fluctuations have been less volatile in the past few months. Many companies have managed to maintain decent stock to avoid shortages, though most have been forced to adopt a more dynamic approach to pricing that is based on the variable cost of individual batches of herbs.
Tariffs are paid by the American importers. However, since the herbal market is competitive and has small margins, most companies are absorbing a lot of the cost to minimize price increases for their customers. As a result, companies are basically struggling to break even and stay alive until more sensible trade policies come back into fashion.
Beyond Tariffs
Chinese herbs have long been prone to fluctuations in price. Yields fluctuate due to global warming, labor costs are increasing, and the price of certain herbs such as huanglian, suanzaoren, and zhuling have been trending upward for years. On top of this, new national standards for granules used in Chinese hospitals have strict requirements; since only a portion of the raw herbs on the market are of sufficient quality to meet the new constituent testing requirements, prices have gone up for high quality herbs that are able to meet these standards.
Beyond natural factors such as weather, yield, and quality, human factors are involved. In China, herb prices fluctuate like the stock market, and speculation and hoarding can contribute to rising raw material costs. The dollar is weaker against the yuan, shipping costs are higher, herb prices are rising, the world is changing. Yet nothing is quite as painful or as pointless as the tariffs.
The Evolution of the Tariffs
At present, many herb companies are essentially celebrating that tariffs on herbs from China are “only” 33.9% instead of 43.9%, so everyone is trying to stock up. A year ago, the highest tariffs were 13.9% (prior to Trump’s first term, the highest tariffs for most Chinese herbs were only 6.4%).
How did we get here?
During Trump’s first term, a new tariff on Chinese goods added an extra 15% to the base tariff of 6.4%. This 15% added tariff was later reduced to 7.5%, and it has remained in effect for the past eight years or so. Thus, the total added tariff cost for herbs from China was about 13.9% (6.4% + 7.5%= 13.9%) in 2024.
In Trump’s second term, the tariffs have changed several times. Tariffs on Chinese herbs first went up by 10% in February, then went up by another 20% in March. For a few months starting in April, the tariffs were over 145%; many companies simply didn’t import anything for several months, and shortages began to arise. Customers anxious about tariffs stocked up before the inevitable price increases, and most of the major herbal companies sold out their old stock and had to adjust prices for the new batches.
Eventually the administration backed off from the 145% tariffs, leaving a 10% general tariff plus a 20% “fentanyl” tariff specific to China. In November, the “fentanyl” tariff was reduced by 10% (from 20% to 10%). All these tariffs are additive, so the current tariff is 6.4% (original) + 7.5% (China tariffs imposed in the first Trump administration that are still in place) + 10% general tariff (applied to most countries starting in the second Trump term) + 10% more for a China-specific “fentanyl” tariff.
The modest reduction from 43.9% tariffs to 33.9% in November is a step in the right direction. Nonetheless, it is not nearly enough to bring prices dramatically down for practitioners.
At Legendary Herbs, we are grateful to work with a tight community of excellent practitioners, and we truly appreciate your support during this unprecedented time. We will always work hard to maintain the best quality and the best prices in the industry, no matter what challenges arise. Thanks for working with us!
