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Trump’s Return: What It Could Mean for the US-China Beauty Trade

Published December 22, 2024
Published December 22, 2024
Wesley Tingey via Unsplash

Donald Trump's second term is stirring up conversations about the future of global trade. While beauty may not face the direct disruptions threatening core industries like tech or automotive, the industry’s deep reliance on international supply chains and cross-border commerce means any geopolitical shift could have a ripple effect.

In this analysis, BeautyMatter examines how a Trump presidency could reshape the US-China beauty market, the industry’s broader global impact, and how brands might navigate potential trade headwinds while seizing new opportunities.

A Market Under Pressure

Trade tariffs, one of Trump’s hallmark policies, are already looming large over the global beauty sector. Trump’s campaign has revived talk of tariffs as high as 60% on Chinese imports—potentially reigniting the US-China trade war that defined his first term. Just recently, he reiterated plans to impose a blanket 10% tariff on all Chinese goods on social media, reigniting fears of trade disruption.

For Chinese beauty brands, this could severely undercut their price advantage—a key factor driving their US expansion in recent years.

Social media platforms like Instagram and TikTok have played a pivotal role in elevating Chinese beauty (C-beauty) with buzzwords like “affordable luxury” and “aesthetic packaging.” Brands such as Flower Knows Beauty, known for elaborate, fantasy-inspired designs at a fraction of Western competitors’ prices, have carved out a unique niche.

The real threat goes beyond ultimate product tariffs—it’s about the entire supply chain. Higher import duties on components like patented ingredients or custom packaging sourced from China could escalate production costs across the board.

While implementation details remain unclear—whether tariffs would apply to finished products or raw materials—brands are already bracing for potential disruption. Compared with big names, which might qualify for tariff exemptions or have the financial capacity to rework their supply chains, smaller brands might struggle more. 

Edgewell Personal Care, parent company of Banana Boat, recently signed multiyear contracts with Chinese suppliers, anticipating potential tariff increases. 

Even established names like e.l.f. Beauty, which sources extensively from China, are watching closely. The brand faced a 25% import tariff in 2019, forcing a supply chain overhaul. Mandy Fields, e.l.f.’s CFO, revealed during a November 6 earnings call that Chinese-made goods now account for 80% of the brand’s portfolio—down from 99% five years ago. “We’ve been here before,” Fields noted. “If tariffs return, we’ll revisit strategies from 2019, including cost-cutting measures and supply chain diversification.”

Rising trade tensions could also stir nationalist consumer sentiment in both countries. American consumers might “buy American,” while Chinese consumers could gravitate further toward local brands.

More concerning, however, is how strained US-China relations could dampen overall consumer spending in both markets. As economic uncertainty mounts, consumers may pull back on discretionary purchases—a trend already weighing on China’s luxury beauty sector.

Opportunity Amid Uncertainty

Despite potential trade war fallout, new opportunities could emerge.

1. Europe’s Advantage:

Trump’s protectionist policies might push China closer to Europe. An historic investment agreement between China and the EU was reached at the end of Trump’s first term, laying the groundwork for increased European beauty exports to China. Brands like L’Oréal could gain even greater market access if US-China relations sour further.

2. Travel Retail Revival:

Travel retail and duty-free sectors could also benefit, as price-sensitive consumers seek better deals abroad. Estée Lauder flagged travel retail’s struggles in its latest earnings call, noting that beauty sales in Hainan dropped over 40% in Q4 compared to the previous quarter. A trade-driven spike in overseas shopping could help reverse that trend.

3. Shifting Chinese Beauty Expansion Plans:

For Chinese beauty brands, the US may lose its appeal as a top export destination. Marketing Professor Michel Gutsatz, Chairman of fragrance brand Le Jardin Retrouvé, argued that cultural differences and persistent stereotypes could slow Chinese brands’ expansion in the U.S. “Southeast Asia might be a better market entry point, given its shared cultural background,” Gutsatz told BeautyMatter.

Future-Proofing Strategies for Global Beauty

Even though Trump’s potential policies remain speculative, the industry is already reassessing its approach to supply chain resilience and market diversification.

Gutsatz emphasized that brands should not only adjust logistics but also invest in localized product development and communications strategies. “Balancing brand DNA with local consumer expectations is essential—even in stable times,” he noted.

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