What: Trump's proposed tariffs of up to 60% on Chinese imports threaten to disrupt the US beauty industry's USD 2.6 billion trade surplus by forcing supply chain restructuring and price increases across 25,000 mass-market products.

Why it is important: As beauty retailers already grapple with supply chain reorganization and rising costs, the proposed tariffs could accelerate industry transformation, particularly affecting smaller independent brands and potentially reducing market diversity.

President-elect Donald Trump's proposed tariff policies signal a significant shift in US trade relations, with far-reaching implications for the beauty industry. The proposed measures include a universal tariff of 10-20% on all imports and a substantial 60% duty on Chinese goods, with potential increases targeting Canada and Mexico through USMCA renegotiations. These changes threaten to disrupt the beauty sector's established supply chains and manufacturing processes, potentially affecting over 25,000 products in the US mass beauty market. The Personal Care Products Council emphasises the industry's significant contribution to the US economy, including a USD 2.6 billion trade surplus, which could be at risk. Smaller independent brands face particular challenges due to limited financial flexibility, while larger conglomerates may better weather the transition. The prospect of reshoring presents both opportunities and challenges, with only 7% of beauty products currently manufactured domestically. Higher labour costs and limited raw material availability in the US pose significant hurdles for brands considering local production, though some companies are already adapting through hybrid approaches and strategic supply chain diversification.

IADS Notes: The beauty industry's response to Trump's proposed tariffs builds upon significant shifts already observed in the sector. As noted in January 2025, BCG's analysis shows that a 60% tariff on Chinese goods could add USD 640 billion to US import costs , forcing beauty retailers to reconsider their supply chain strategies. This aligns with trends seen in November 2024, where major retailers like Ulta Beauty began implementing regional fulfilment centres to enhance supply chain resilience. The industry's vulnerability was further highlighted during the October 2024 port strikes , prompting brands to explore alternative manufacturing locations. Mexico's emerging potential as a manufacturing hub is particularly noteworthy, with its beauty market growing 17% to EUR 7 billion in 2024 , suggesting a viable nearshoring option. However, as revealed in April 2024, changes to de minimis thresholds in both US and EU markets indicate that beauty brands must navigate an increasingly complex regulatory landscape while adapting their manufacturing and pricing strategies to maintain competitiveness.

How US tariffs would hit beauty