Price hikes, layoffs and alternative markets: Personal care navigates US tariff troubles

Personal care companies are deliberating on how to address the massive rollout of US tariffs and navigate an uncertain economic climate. Some are passing the extra costs to consumers, while others turn their attention to different international markets and cut operating expenses, including employees.  

British specialty chemicals company Croda International has announced it will pass on any additional costs from the US tariffs to its customers. Croda will place the tariff-related surcharge on its cosmetics and personal care ingredients.  

“Although our well-balanced local manufacturing and procurement model helps to mitigate our direct exposure to tariffs, we are assessing the likely impact and intend to apply a tariff surcharge to cover any associated incremental costs,” said Croda during a first-quarter trading update. 

Last year, Croda’s sales from North America accounted for almost 24% of its annual revenue. 

Avoiding tariffs

US President Donald Trump has been vocal about his negative view toward the US’ trade relations with China. Accordingly, he announced a 145% tariff on the country. However, last week, he stated this number would “come down substantially.” China said last Friday it was not in talks with the US.

China is a major exporter of cosmetics and cosmetic ingredients. In 2023, the country exported US$4.41 billion in beauty products, primarily to the US, reports the Observatory of Economic Complexity.

China is a major exporter of cosmetics and cosmetic ingredients.Cosmetics brands selling their products on Amazon and Walmart are reportedly moving their inventory to Canada to avoid paying the US tariffs on Chinese imports. These independent beauty brands and suppliers are moving their stock from China to Canadian warehouses that offer tariff exemptions, duty relief, and potential rebates.

Last month, Canada applied 25% tariffs to a list of goods worth CA$30 billion (US$20.8 billion), including cosmetics, “in response to unjustified US tariffs.” The move coincided with the appointment of Mark Carney as Canada’s new prime minister, who vowed to win the trade war with the US.

Canada’s general elections today are between Carney, Pierre Poilievre, leader of the opposing Conservative Party, and Jagmeet Singh, the leader of the New Democratic Party.

The next vote was initially scheduled for October 20, 2025 but was brought forward after Canada’s governor general accepted the prime minister’s advice to dissolve Parliament. The main talking points for this election are how the country will battle US President Trump’s tariffs and his persistent statements on wanting to make Canada the 51st US state.

Layoffs and investments

Saks Global, an American holding company of department stores, has revealed that it will make 450 jobs redundant and close a Tennessee fulfillment center, citing Trump’s tariff policies as the reason. The company filed a WARN notice with the state’s Department of Labor and Workforce last week.

The US department store owner reportedly threatened further closures and layoffs as Trump’s tariff policies threaten to curb consumer spending, according to a report published by Retail Drive.

Personal Care Insights recently spoke to Alejandro Abad, senior VP at Kensing, who predicts that consumers will look for cheaper alternatives to everyday beauty products as tariff costs cause price hikes. 

Due to tariff pressures, South Korean beauty brand Amorepacific also said it would increase its investment in US logistics and module manufacturing facilities over the next five years. European beauty companies previously urged the EU to exclude American cosmetic goods from its tariff.

The company CEO, Kim Seung-hwan, spoke to Bloomberg about how its US manufacturing capabilities were set to be rolled out over a longer period, but the US tariffs have caused the owner to speed up its plans. The US has imposed 25% tariffs on South Korea. 

While Amorepacific is looking to boost its US manufacturing, other players in the personal care industry are exploring other international markets.

Indonesia’s palm oil producers, for instance, want to boost sales in different countries following the US government’s announcement of 32% import tariffs. The world’s biggest palm oil producer is reportedly searching for new revenue streams in Africa, the Middle East, Asia, and Europe.

Major European beauty companies previously urged the EU to exclude American cosmetic goods from its tariff rollout. The group of 16 beauty executives warned that tariff retaliations against the US could hurt the EU’s personal care industry — one of the region’s biggest sectors.