US CPG sectors, including cosmetics and personal care, are facing significant uncertainty as recent tariff announcements from the Trump administration introduce new complexities for manufacturers and suppliers. As the new policies continue to take shape, beauty industry stakeholders are paying close attention to the potential impact on global supply chains and trade agreements.
Recent tariff announcements and their implications
In a shifting trade landscape, the new tariffs can create complicated or unclear circumstances for national and global industry business planning. “These announcements are constantly evolving, seemingly by the hour, making it increasingly difficult for companies to strategize and plan accordingly,” Lucas Rock, an associate at ArentFox Schiff, said CosmeticsDesign.
On January 27, President Trump threatened to impose an additional 25% tariff on goods of Colombian origin. However, implementation was delayed after Colombia agreed to accept deported migrants.
On February 1, three executive orders introduced additional tariffs on products from Mexico, Canada, and China, initially set to take effect on February 4, 2025.
The 25% tariff on Mexican products and the 10% tariff on Canadian energy products were postponed following negotiations with Mexican President Claudia Sheinbaum and Canadian Prime Minister Trudeau until March 4 as negotiations continue on migration and illicit drug trade issues.
Meanwhile, the 10% tariff on Chinese goods took effect as scheduled on February 4.
“The additional tariffs on Chinese goods are already impacting importers, and companies must evaluate their exposure to these costs immediately,” Rock stated.
The administration also temporarily reinstated duty-free de minimis treatment for Chinese goods until “adequate systems are in place” to process and collect tariffs. “This temporary measure offers some relief, but businesses should prepare for its removal and the associated cost implications,” he added.
Additionally, President Trump has signaled the potential for reciprocal tariffs on unnamed countries as early as this week, including today’s announcement of 25% tariffs on steel and aluminum.
Impact on e-commerce retailers
These tariffs could pose significant financial burdens for e-commerce retailers in China who are selling to US consumers. “Once the temporary reinstatement of duty-free de minimis treatment for products of China is removed, low-value shipments from e-commerce retailers may face significant duties,” Rock noted.
He also advised that companies should prepare for additional import requirements, including potential increases in customs bond amounts. “Businesses need to anticipate these costs and explore alternative sourcing strategies where possible,” he said.
Strategies for cosmetics and personal care manufacturers
Manufacturers and importers in the cosmetics and personal care sector should consider proactively assessing their exposure to these tariffs. “Importers and manufacturers of cosmetics and personal care products can review the tariff classification and country of origin of their products to assess whether their products are subject to these tariff measures,” said Rock.
To mitigate financial impact, he advised companies to consider revising supplier and customer contracts to ensure adequate protection, exploring alternative terms of sale, and implementing duty savings strategies.
“One of the best ways for businesses to adapt is to reassess their supply chain and look for ways to optimize cost savings,” he advised.
Key takeaways for industry stakeholders
“The Trump administration’s trade policies are evolving quickly,” Rock emphasized, “making it crucial for companies to stay updated on these tariff changes.” He urged cosmetics and personal care manufacturers to consider reassessing their import compliance programs to maximize duty savings and maintain regulatory adherence.
“These tariff measures underscore the importance of having a robust compliance program in place,” he said. adding that “companies that proactively manage their tariff exposure will be in a stronger position to weather these changes.”
He concluded that evaluating potential tariff exposure and preparing for the financial implications of these measures will be essential to sustaining business operations amid ongoing trade uncertainty.
