Since the newly appointed President of the United States, Donald Trump, took office, he has flipped the script, particularly across DEI, tariffs, and trade policies. While countries like Canada, China, Mexico, Ukraine, and South Africa were President Trump’s initial targets, he now appears to be preying on countries like South Korea. In a recent session to Congress, Trump said South Korea has an “unfair tariff against American products.”
The president (incorrectly) stated that South Korea’s average tariff is four times higher than China's. “Think of that, four times higher, and we give so much help militarily and in so many other ways to South Korea, but that’s what happens. This is happening by friend or foe.” This has caused both national and international upheaval and confusion.
The ongoing trade tensions between the United States and South Korea have created a ripple effect across various industries, with beauty—especially the Korean beauty (K-beauty) sector—at the center of this unfolding dispute. President Trump’s latest assertions about South Korea’s trade policies have raised questions about whether retaliatory measures will be introduced, which would significantly affect the beauty industry’s global supply chain and market dynamics.
While K-beauty has cemented itself as a dominant force in the US cosmetics industry, potential tariff hikes pose a direct threat to its market penetration, pricing structures, and overall growth trajectory. The implications of this escalating dispute extend beyond K-beauty; it also trickles down to influencing consumer behavior, global competition, and strategic positioning within the beauty industry.
K-Beauty’s Economic Footprint in the United States
Valued at $91.99 billion in 2022 and expected to grow at a CAGR of 9.3% from 2023 to 2030, according to Grand View Research, K-beauty’s meteoric rise in the US market has been nothing short of explosive. South Korea has become one of the largest exporters of beauty products to the United States, rivaling traditional powerhouses like France and Canada. According to a report by Landing International, South Korea’s cosmetics exports to the US reached $1.2 billion in 2023—double the 2020 figure. In the first four months of 2024, South Korea accounted for 20.1% of all US beauty imports, surpassing European luxury brands in specific categories.
“We are seeing more major retailers dedicate exclusive space to Korean beauty assortments and expect continued growth in coming years,” said Allison Tryk, Director of Sales at Bloomkare, a Seoul-based distributor of Korean-only beauty brands to markets like the US. Target introduced a new K-beauty dedicated section this year. At the same time, Ulta Beauty also has a K-beauty section. Tryk told BeautyMatter Bloomcare is currently working with Bristol Farms to offer an exclusive curation of K-beauty in their California locations.
The allure of K-beauty lies in its innovation. With advanced skincare formulations, high-performance ingredients, and trendsetting product formats, K-beauty has redefined global beauty standards. “It’s difficult to stay ahead of true innovation. It is likely that domestic brands that adopt existing innovations are not researching which innovations Korea is investing in now,” Tryk said. “Korean formulas are supported by clinical studies, data, and research years in the making.
The Potential Seismic Impact of Tariffs on K-Beauty
Any move to impose tariffs on South Korean imports could have severe financial repercussions for K-beauty brands operating in the US, and even the beauty industry in the country. For starters, these brands could seek newer markets and with less tariff barriers. “There is no reason to focus market development efforts in a market where your products will be priced out by tariffs,” Global Supply Chain Strategist, Kimberly Reuter, told BeautyMatter. “Instead, companies have every reason to shift marketing and product development toward non-US markets.”
Higher tariffs would invariably increase costs, forcing brands to either absorb financial losses or raise prices. Although this isn’t in motion, Tryk noted the current standing of the Korea-United States Free Trade Agreement (KORUS FTA): “We are seeing some expedited interest from retailers since the KORUS FTA is still active. So, while imports from China face 20% tariffs, Korean imports remain tariff-free, making K-beauty an excellent inventory investment.”
Charlotte Cho, the founder and CEO of skincare brand Then I Met You and co-founder of K-beauty e-tailer SokoGlam, agreed with Tryk. “We are not anticipating any US tariff hikes [since] Korea and the US have a longstanding FTA that has made tariffs under 1%.”
Given that K-beauty’s appeal is rooted in its ability to deliver luxury-level skincare at relatively affordable prices, any upward price adjustments could erode its competitive edge and be disadvantageous to the US. “We can already see in Mexico and Canada how President Trump’s reaction is quite volatile and not grounded in a rational and factual policy world. When markets react sharply, the administration will pull back or delay measures,” said Cho.
Beyond pricing, tariffs could also disrupt supply chains. Many K-beauty brands already rely on complex global networks for sourcing raw materials, manufacturing, and distribution. If tariffs inflate costs on South Korean imports, some companies may be forced to shift manufacturing to alternative locations, potentially impacting product quality, consistency, and availability. Experts believe that impact may not be imminent. “Ingredient sourcing and raw materials for K-beauty products are sourced globally. There will be little to no impact at this time,” Cho said.
The ramifications extend to US retailers as well. Major stockists like Ulta Beauty, Amazon, and department stores have integrated K-beauty into their core offerings. If tariffs result in higher wholesale prices, these retailers may be inclined to scale back their K-beauty assortments in favor of domestic or non-impacted European alternatives. In the same vein, Korean brands and retailers of K-beauty would be forced to look elsewhere for other viable markets. “Our company is headquartered in Seoul, so we will not be looking for other Asian brands,” Tryk said.
While K-beauty would bear the immediate brunt of new tariffs, the broader beauty industry would not be immune. In an industry that thrives on innovation, tariffs could also slow the influx of cutting-edge products from South Korea. Many global beauty brands look to South Korea as an R&D hub, drawing inspiration from its technological advancements in skincare and cosmetic science. If tariffs discourage South Korean exports, the entire industry risks stagnation in terms of innovation, which could impact product development cycles globally.
However, many Korean brands with localized manufacturing hubs in the US stand to benefit. “Some of the top and largest Korean cosmetic manufacturers such as Cosmax and Kolmar have invested in building plants in the US,” Cho said. “If tariffs go into effect, it is possible that there may be more Korean beauty brands utilizing these localized plants to avoid them, especially if their US business is sizable. However, COGS [cost of goods sold] for formulas in the US are generally higher than Korea due to labor costs, so it might be negligible to change the source or location of manufacturing,” she added.
Strategic Adaptations and the Road Ahead
Trade wars are historical ongoings, and the looming one between the US and South Korea would be no different. In response to these potential challenges, while many K-beauty brands will likely adopt a range of strategies to mitigate risk, like exploring relocating manufacturing hubs, others may seek strategic partnerships with US-based production facilities to bypass trade restrictions altogether. “There are various importing programs that allow for duty optimization,” Reuter said. “Foreign manufacturers could consider becoming importers of record in the US and selling domestically instead of conducting foreign transactions. Other brands could consider shifting selling terms to allow manufacturers to pay duties directly in the US.”
Retailers, on the other hand, may negotiate alternative trade agreements or lobby for exemptions, given the significant role K-beauty plays in their sales performance. As BeautyMatter learned and Tryk said, the South Korean government has been a massive supporter of K-beauty, which can be leveraged. “Significant investments are made in [Korean] research and development to stay ahead of innovation curves,” she said. “In addition, tax breaks are offered to export-only companies, so global distribution will likely remain important despite potential tariffs. Having created an environment where innovation and quality thrive, I don't think that tariffs will result in disaster for K-beauty.”
Ultimately, the trajectory of this trade dispute remains uncertain. While political rhetoric continues to dominate headlines, actual policy decisions will determine whether these concerns materialize into concrete financial consequences. For now, the beauty industry—particularly the K-beauty sector—remains on high alert, preparing to navigate the potential upheaval that could redefine its relationship with the US market.
