Trump's Tariffs Threaten European Beauty Industry Amid Trade Tensions

The European beauty industry faces uncertainty as Donald Trump considers imposing 25% tariffs on cosmetics and fragrances from the European Union. In 2023, the EU exported $4.96 billion worth of beauty products to the U.S., with France leading at €2.8 billion. FEBEA, France's main beauty association, calls the situation "extremely precarious." Trump's threats include potential 200% tariffs on European alcohol in response to EU tariffs on U.S. spirits. The EU also plans retaliatory tariffs on $26 billion worth of U.S. goods due to U.S. tariffs on European steel and aluminum. While large companies like L'Oréal have U.S. production facilities, small and medium-sized enterprises (SMEs), which make up over 80% of the European beauty sector, are more vulnerable. A 25% tariff could significantly impact their export strategies. The U.S. is a key market due to its size, demographics, and high-income consumers. Countermeasures by the EU could affect U.S. beauty exports to the EU, which totaled $2.16 billion in 2023. This situation echoes the 2018 trade war when similar tariffs were imposed. Current beauty tariffs between the U.S. and EU are around 5%, but a rise to 25% could raise prices and hurt European firms' competitiveness.