Over the last few weeks, tariffs have been the talk of the town in the beauty industry. President Trump imposed six waves of tariffs on Chinese imports, resulting in 145% tariffs currently in effect. China faces up to a 245% tariff (25% reciprocal tariff, 20% fentanyl tariff, and Section 301 tariffs on specific goods between 7.5% and 100%) on imports to the United States “as a result of its retaliatory actions,” according to the White House.

Like many other industries, the beauty industry relies heavily on Chinese goods and raw materials. The vast majority of beauty product packaging comes from China, even for brands that manufacture their products in the United States. While China is bearing the brunt of these tariffs, other countries are also feeling the effects. The existing 10% global tariff imposed on Korea has already impacted K-beauty brands, although this may change in the future, as Korea and the US are still negotiating a proposed 25% tariff.

The extensive consequences of these tariffs include inflation, changes in consumer behavior, and widespread disruptions to international trade. Import tariffs directly increase the cost of goods for businesses and consumers, which can lead to higher prices across the board. Consumer behavior in the US is already beginning to show signs of a major shift. Bloomberg reports that hairdressers and aestheticians say clients are opting for less expensive services and spacing out their appointments, suggesting that consumers are looking to cut costs wherever possible.

Amid so much uncertainty, consumers are being encouraged to stock up on some of their must-have products before prices increase. “If you have a favorite toner or [product,] right now is the time to buy, because it might be the cheapest it’s ever been,” Charlotte Cho, co-founder of Soko Glam, said in an Instagram Reel.

While the tariffs were announced a few weeks ago, brands are still experiencing the ripple effect of these policies and the impact they will have on their businesses in the short and long term. Facing increased packaging costs and operational hurdles, beauty brands are making calculated moves to weather what will inevitably be a bumpy year in beauty. BeautyMatter pulled back the curtain, interviewing founders and executives and asking them to share insider perspectives and insights on how beauty leaders are adapting their businesses in the current climate.

Refocus Brand Proposition & Product Development

Rahua Beauty CEO Farah Azmi has observed that consumers are increasingly price conscious. This has led to a shift towards the brand's shampoos and conditioners, which are considered essential products by consumers, regardless of budget constraints.

“We’re expecting that category to grow the most, while luxurious hair oils and treatments may slow down in the short term,” said Azmi.

Rahua Beauty is adapting to the current economic climate by scaling back its launch calendar and concentrating on fewer, more impactful launches, as consumers are less interested in new products and more cautious with their spending. The beauty brand recognizes that what appealed to their customers in the past may not be as effective today. The fragrance sector is gaining momentum, whereas the skincare industry, which experienced a surge during the pandemic, is now experiencing a slowdown. Azmi plans to refocus the brand's 2025 storytelling strategy by emphasizing scent as the primary driver.

“Scents are having a moment, and it feels like we’re experiencing the lipstick effect, but with sensorial,” she says. “Smelling good with our lotions and other bodycare is making us feel better in these tough times.”

Dr. Christine Martey-Ochola, PH.D, co-founder and cosmetic chemist at NUELE, is adopting a cautious approach for 2025. She cites the possibility of a recession and its potential to negatively affect the retail industry. NUELE invested in expanding its team to increase customer interface and market access. Additionally, the company increased its social media engagement.

“We see opportunity in the virtual retail sector, due to increased customer comfort with digital purchases, and we are expanding our engagement in this sector,” said Dr. Martey-Ochola.

NUELE has decided to postpone new product launches until Q3 to mitigate risk and focus on scaling up areas of the business that have proven resilient during the COVID-19 pandemic and recent years. The brand plans to increase client engagement and conduct new product research in 2025.

“Product development is an ongoing process for us, and we often use volatile economic environments to focus on new [research and development],” said Dr. Martey-Ochola. “Investing in R&D during turbulent times is very beneficial, because there is more time to be introspective and build additional portfolios that are responsive to market needs.”

Closely Monitor Market Signals & Maintain Agility

Nhu Le, the founder of Finding Ferdinand, monitors import tariffs, employment rates, and consumer pricing trends (like grocery costs) to gauge overall economic health and consumer spending behavior.

“If essentials like eggs become as expensive as our products, it signals economic pressure that could affect discretionary spending,” said Le. “As of today, customers are still spending with us despite current market uncertainties.”

Joey Shamah, co-founder of AS Beauty, has observed a decline in consumer demand across the board. He attributes this weakening to consumers' heightened awareness of the present economic challenges. AS Beauty's portfolio includes brands like Bliss, Laura Geller, Julep, and Mally.

“First-hand, we’ve seen a shift to our international business and a US slowdown, but we are still growing, just slower than we have in previous years.”

AS Beauty's digital strategy, operational efficiencies, and current company structure allow it to be more nimble in times of market uncertainty. This gives the company many opportunities to grow with its current brands and explore future acquisitions. Because of this, Shamah is optimistic about the company's future, despite the current softness in the market. AS Beauty sees substantial upside potential for 2025 and plans to maintain its current business strategy.

“Brands that are focused on reaching and acquiring customers at any cost are going to be challenged in a weaker environment. However, the efficient brands that focus on profitability can weather tougher times,” says Shamah.

Slick Gorilla, the leading men's haircare brand in the UK, had intended to accelerate its expansion into the US market in 2025. However, trade tariffs have presented obstacles, directly affecting the company's growth and its entry into the US market. To address these challenges, Slick Gorilla is considering holding more inventory in the US and exploring US-based manufacturing. The brand has also increased its US staff to increase direct communication with US customers. Slick Gorilla believes a strong local team can drive the brand forward and provide a tangible presence for customers, even for a foreign brand.

“We are preparing to invest heavier in the US market in order to fuel growth [and] mitigate risks,” said Lee Martin, Chief Operations Officer at Slick Gorilla. “On the flip side, we are also looking at other potential growth areas and markets, such as Latin America and Asia.”

Slick Gorilla has noticed that retailers and buyers are adopting a low-risk strategy in preparation for an uncertain future. This strategy focuses on lower consumer prices and products made in the US. At the same time, Martin noted that retailers and buyers in markets affected by tariffs, such as Canada and Mexico, have shown a strong interest in diversifying their product offerings away from those impacted by tariffs.

Prepare to Pivot

Kailey Bradt, the founder and CEO of Syndeo, is a start-up advisor, brand strategist, and product developer. Bradt is taking proactive steps to mitigate the impact of supply chain disruptions by collaborating closely with contract manufacturers, securing schedules for raw materials with long lead times, and simultaneously sourcing alternative materials when feasible, ensuring her clients have multiple options.

Additionally, Bradt is strategically ordering in advance items that do not have an expiration date, such as merchandise, packaging components, and e-commerce mailers. She advises small, early-stage brands to maintain lean operations, particularly when facing uncertain situations. She believes that being resourceful is crucial for founders, but also emphasizes the importance of having the right operators on your side to execute what needs to be done to survive during a time like this.

“Fractional executive support is game-changing, not only because of the value for the time, but also because of the relationships these industry experts can tap into during times of uncertainty,” she said.

Renée Rouleau, the founder, CEO, and esthetician behind Renée Rouleau Professional Skin Care, has led her eponymous brand for almost 30 years. Although her products are manufactured in the US, some ingredients and all packaging are sourced overseas, including China. The tariffs will lead to increased costs, but as the sole owner of her company, Rouleau has decided to implement internal changes to absorb these costs and prevent them from being passed on to her customers. To offset these costs, Rouleau decided to downsize her company’s office space when the lease expires in the fall, which she anticipates will save approximately 5% of the company’s monthly operating expenses.

“In business, there's always going to be costs we can control and costs we cannot,” said Rouleau. “This was my dream office, and the nicest office I've ever had, but we can downsize. That's a very easy thing to change.”

Rouleau is monitoring how brands respond to the tariff news and expressed concern that some companies are using this as an opportunity to raise prices unnecessarily. As a result, she is having to examine her vendors and processes to find potential cost-saving opportunities and efficiencies.

“I think there's some price gouging that's going on,” she said. “I've been seeing increases from [brands and vendors], and they're blaming it on the tariffs … I think consumers are feeling pinched because brands are raising prices, and some of it is justified, and some of it I don't believe is justified.”

Rouleau has been in business for almost 30 years and attributes her success to maintaining a healthy company. This includes smart planning, a strong supply chain, a good team and culture, quality products, and customer satisfaction. She currently has no plans to raise prices and hopes to avoid doing so by absorbing some of the costs on the back end.

“As a leader, I never panic,” she said. “I sleep just as peacefully as I did before this was announced. I'm not going to do a flash sale to increase profits in the short term. It's the old expression of ‘this too shall pass.’”

“This isn't going to take us down,” she concluded. “We just make adjustments and move on.”