The Chinese herbal medicine market is undergoing significant changes, and these shifts will impact prices and supply here in the U.S. After a turbulent year in 2024 marked by continuing price and supply disruptions, 2025 is shaping up to be another year of challenges. While China works to stabilize its market through new policies, global factors—particularly the ongoing U.S. and China trade tensions—are already affecting herbal supply chains in the U.S.
How Tariffs Are Impacting U.S. Herbal Markets
A tariff is a tax imposed by the government of a country collected on imported goods. In addition to being a source of revenue for a country, import duties are also a means by which to regulate foreign trade and to create policy that taxes foreign products to encourage or safeguard domestic industry. Contrary to what some believe, tariffs are not a tax on China or any exporting country. Tariffs are paid by the importer, and these additional costs in whole or part are passed through to the consumer. In the case of Chinese herbs, these additional taxes are passed through to wholesalers, U.S. herbal manufacturers, practitioners, and ultimately to patient consumers. The net result of this tax is an increase in the price of products.
Trade tensions between the U.S. and China have already resulted in higher prices for imported Chinese herbs since 2016, when the first Trump Administration imposed 15-25% tariffs on various Chinese goods—including herbs. This second Administration has added an additional 20% tariff (effective March 4th) which now brings the tariff on Chinese herbs to a staggering 35-45%.
Since one intent of the tariffs is to push manufacturing to the U.S., some may suggest growing Chinese herbs domestically as a solution. However, it's important to recognize that at least most herbs cannot be grown or processed on a large scale here without significant investment and a market willing to pay at least three to five times more. Also, although a few groups have had success growing small crops, the infrastructure and expertise needed to grow and process herbs and to manufacture finished formulas according to Chinese Pharmacopoeia standards is still lacking in the U.S. To replicate our Plum Flower™ formulas, we would need for 285 herbs to be grown in the U.S. This endeavor, even if obstacles could be removed, would take years to implement and would result in much higher prices for Chinese herbal medicine products.
China’s Herbal Market: A Time of Transition
In 2023, the global market for traditional Chinese medicinal herbs was valued at over $12.7 billion USD and is expected to surpass $27.8 billion USD by 2025, more than doubling over 2 years. Especially since Covid, China has been working to strengthen its herbal medicine industry with initiatives like the Traditional Chinese Medicine Revitalization and Development Plan. This plan focuses on everything from supporting widespread cultivation to processing and distribution, thus adding more regulation and structure to the market.
Despite these efforts towards long-term growth, the industry faces several short-term struggles that affect availability and price:
- Overproduction: The land dedicated to growing Chinese medicinal herbs is expected to reach 7.4 million acres by 2025. However, with an estimated 40% surplus due to stockpiled inventory especially by market speculators (see Mayway Supply Chain Update Fall 2024), some growers may face financial losses. In the short-term this could benefit U.S. consumers by lowering costs and helping to mitigate the impact of rising tariffs (although the behavior of speculators may upset this). Over the long-term it may negatively affect future farming capabilities as farmers turn to growing more price-stable crops.
- Price Volatility in Herb Markets: The prices of key herbs, such as Codonopsis (Dang Shen) and Angelica (Dang Gui), have experienced significant and unpredictable fluctuations, making pricing a major concern for producers and consumers alike. The price of Codonopsis has fluctuated by as much as 25-500% since 2020. This volatility can be attributed to increased demand during the Covid-19 pandemic and crop damage caused by heatwaves. As prices rose, farmers were incentivized to plant more of this high-value herb. With a planting cycle of around three years, much of the new inventory became available on the market in 2024, which helped bring prices down. At the same time, speculators who had stockpiled these herbs began releasing their inventory to avoid losses, causing the market to experience a sharp decline.
- The price of Angelica has seen rapid growth in recent years. From 2021 to 2023 we saw the price increase 4x to 16x! The relatively short planting cycle of about six months led farmers to switch from other cash crops to growing Dang Gui. As a result, planting areas expanded significantly in certain regions. Fortunately, this increase in production has helped bring prices back down to more affordable levels for now.
- While some may question how we guarantee consistent quality amidst the varying stock being offered in the marketplace, we address this concern through strong relationships with trusted growers, longtime expertise and rigorous laboratory testing. These tests ensure that our herbs meet both our high-quality standards, and the specifications outlined in the Chinese Pharmacopeia. Each batch undergoes a minimum of 20 testing parameters before it is packaged into our Plum Flower™ Premium herb bags and makes its way onto your shelves.
- Climate Change: The impact of climate change cannot be understated. Weather events like El Niño have resulted in drought and floods in different regions (and sometimes alternating in the same region) which has severely affected herb yields and thereby supply and prices.
- Regulatory Changes: Stricter pesticide regulations expected in 2025 will likely result in lower yields for certain herbs, affecting their availability, and again, price. On the positive side, these regulations may make it easier for Mayway to source herbs that meet our higher quality standards. In 2023-2024, we tested over 600 batches of raw herbs for our Plum Flower™ Premium herbs and unfortunately had to reject over half due to pesticide issues alone. While this process is both costly and time consuming, it’s a crucial step to ensure we're providing our customers with safe, effective, and high-quality herbs.
- China’s Centralized Procurement Program: Starting in April 2025, China will implement a nationwide program to centralize the procurement of 45 commonly used medicinal herbs. This program will involve over 32,000 medical institutions and secure 97 million kilograms of raw herbs. The goal is to stabilize prices, improve quality control, and reduce herbal medicine costs for Chinese patients. However, with the domestic market taking priority, it also means there would be more competition for herbs, which could affect prices and availability for international buyers.
The Bottom Line
- Higher Prices: The added tariffs and the volatility of the Chinese herbal market mean that prices for Chinese herbs, particularly for premium quality, are expected to rise.
- Possible Shortages: If government procurement policies, climate disasters, and tariff-averse purchasing decisions limit exports, even popular herbs like Astragalus (Huang Qi), Codonopsis (Dang Shen), and Atractylodes (Bai Zhu) could become harder to source in the U.S.
Navigating These Changes and Our Promise to You
With so many shifts happening in China’s herbal industry and the uncertainty surrounding trade between U.S. and China, businesses like ours strive to stay informed and flexible as these changes take place. We will continue to keep you apprised of the market situation and how it affects you and your patients. We will do our best to keep our products in stock in the face of quality challenges and fluctuating availability and prices. However, although we've worked very hard to absorb much of the cost increases in the past, this significant increase in tariffs is not feasible for us to absorb entirely, and in the coming months you may notice price increases as we receive new inventory. At the time of this writing, the tariff situation is seemingly fluid, and increases will depend on the actual rate applied when new shipments arrive in the coming months.
What You Can Do
We’ve received many inquiries from practitioners asking whether they should stock up on herbs. Our advice? Don’t order more than you need. Although tariffs are certainly a consideration, please keep in mind that the actual prices of herbs in China fluctuate. We will do our best to keep prices stable for as long as we can. From recent news, we see that there will likely be much negotiation as the undesirable consequences of the trade war become apparent. While challenges lie ahead, we will adjust to these market changes and remain committed to offering our customers the highest-quality herbs and products at competitive prices.
What you can do is call or write to your senator or congressperson and urge them to oppose additional tariffs on Chinese goods, particularly Chinese herbs since a carve-out for products that are grown in China and that cannot be easily reproduced in the U.S. seems appropriate.
While we hope the Administration will reconsider its decision soon, as ever, we appreciate your understanding and support as we continue to navigate these challenges together. Always know, we are here for you!