US President Donald Trump is mad at Canada. Again.
His attempt to change Lake Ontario to Lake America may be dominating headlines, but the 50% tariffs he levied on Canada through a series of executive orders on July 20 are casting a dark cloud on commerce between the two North American countries.
From cosmetics and personal care conglomerates like L’Oréal and Estée Lauder—both of which manufacture in Canada, to small, independent Canadian brands—Trump’s temper tantrum could result in substantial financial losses for the beauty industry. And Canada’s clapback of imposing approximately $20 billion in dollar-for-dollar counter-tariffs on 700-800 American products, which go into effect on September 8, further worsens the situation.
The tariffs affect every aspect of the supply chain: cosmetic ingredients, natural and botanical materials, and packaging materials, threatening to raise costs and upset manufacturing and distribution networks. Importantly, Canada-United States-Mexico Agreement (CUSMA)-compliant products are not exempt from this, which would violate the agreement.
As negotiations remain highly strained, with no solution in sight, the tariffs will force beauty companies to determine whether to absorb the additional costs, pass them on to consumers, or even rethink where and how their products are made.
“When you put tariffs and counter-tariffs on so quickly, you will disrupt manufacturing systems, supply chains, distribution channels all across North America to no one's immediate advantage,” Darren Praznik, President and CEO of Cosmetics Alliance Canada, told BeautyMatter. “In many ways, companies are now having to imagine the unimaginable.” Canada was the second-largest source of US beauty and skincare imports in 2025, after South Korea, supplying more than $1 billion worth of products to the US. Canada is also the largest export market for the US cosmetics and personal-care industry, accounting for $4.2 billion in annual exports, according to the Personal Care Products Council (PCPC). This makes it one of the industry’s most important trading partners.
So despite these tariffs affecting goods and industries, beauty is especially exposed because almost all aspects of its integrated North American supply chain are now being disrupted.
“Tariff-free trade has allowed us to be very efficient in our supply, manufacturing, and product distribution ways,” Praznik said. “It has achieved what any economist would say is the best result for anyone. So when Trump decided to abandon conventional economics, he has thrown a wrench in a well-working system, and it's blowing up to some degree.”
This tariff escalation is part of a trade dispute that has been unfolding since Trump returned to office in 2025. In February, the administration announced 25% tariffs on most Canadian goods and 10% on Canadian energy. Canada responded with 25% tariffs on roughly $30 billion of US imports, to which the US later raised its tariff on Canadian goods to 35%. Since then, the two countries have played a game of back-and-forth, leaving businesses and consumers at the mercy of the ever-evolving trade war started by Trump.
For the PCPC, which supports more than 2.6 million American jobs and exports $15.8 billion in products each year, “Trade barriers risk disrupting the efficient and predictable movement of products across the border, and potentially limiting consumer choice and access to everyday products,” said Heather Helm, Executive Vice President for Global Strategies, in a statement.
Helm cited concerns that the tariffs could stunt the industry’s growth and overall competitiveness, while reaffirming that consumers, who rely on these products in their daily routines, will experience the effects through product unavailability, reduced quality, and higher prices.
The tariffs are already appearing in financial results. For even the industry’s biggest players, there is a cost to manage. L’Oréal CEO and Director Nicolas Hieronimus acknowledged on the corporation’s latest earnings call, on July 30, that tariffs had affected the company’s gross margin, but that the company was able to offset some of the impact.
“We had good work and good news on the gross margin at 10 basis points despite 20 basis points of negative impact of the tariffs,” he stated. “And we wanted to deliver 20 basis points of profit increase.”
Estée Lauder is also exposed to this disruption through its Canadian manufacturing operations, including production tied to brands like MAC Cosmetics and The Ordinary, which originate or scale heavily out of Ontario. For companies with manufacturing operations across multiple countries, the tariffs could mean rerouting production or reconsidering how they supply individual markets.
“The reality is, our industry is highly competitive. If you withdraw from the market, someone else is likely to fill it,” Praznik said. “So, the big question is, can you afford to give up that revenue?”
For larger companies, that could mean supplying Canada from other parts of the world to minimize tariffs. Others may move production to Canada instead. According to Praznik, companies could use Canada's established contract manufacturers rather than build their own factories, helping them avoid some tariffs.
But while multinationals have the resources to adjust across a portfolio of brands, smaller beauty companies don't have the luxury of working on such a global scale.
Cheekbone Beauty, a Canadian Indigenous-owned beauty brand, issued a statement saying that the 50% tariff makes it “financially unworkable” to continue shipping its Canadian-made products directly to the US, and it is pausing those shipments indefinitely.
“We are not able to absorb that cost, and we do not think it is fair to pass a 50% price increase onto [consumers],” said Katelynn Miron, the brand’s Marketing Operations Manager. “This is not a decision driven by strategy or growth targets. It is the reality of being a small, independent, Indigenous-owned business trying to make responsible choices in a fast-changing trade environment.”
For others, like AG Care, a professional haircare brand that both formulates and manufactures in Canada but uses many ingredients sourced from the US, the tariffs will add costs for the brand, which intends to absorb the tariffs in hopes that this is a temporary dispute. They have also temporarily halted shipping to the US.
The response from these small businesses highlights the uneven impact of the tariffs across the industry, where the consequences can be much more immediate, including the loss of access to an entire market.
The longer the tariffs remain in place, the harder it will be to keep those costs down for consumers. The pressure can be significant for lower-priced beauty products, where there is less room to absorb an increase without affecting profits.
The effects also extend to beauty and haircare professionals. At hair salons, for example, higher costs for products and supplies can put pressure on their already tight margins. Megan Skaggs, who runs the Instagram account @beautyofwealth_ to help hairstylists take control of their financial futures, estimates that rising costs could mean roughly $5 less in profit per client. At 16 clients a week, that would amount to more than $4,000 a year.
Whether the cost is absorbed by a manufacturer, passed onto a distributor, reflected in product prices, or simply built into the cost of a salon service, the tariff never really disappears. As it affects multiple levels of the supply chain, some portion of that cost is inevitable when it reaches the consumer.
And it’s clear that the uncertainty of the dispute may be as disruptive as the tariffs themselves.
“For decades, consumers and businesses in Canada and the US have benefited from a strong and reliable bilateral trading relationship,” said Helm. “PCPC encourages US and Canadian officials to build on that longstanding partnership, resume constructive negotiations, and pursue a durable solution that restores certainty and keeps goods moving across our shared border.”
For now, beauty companies will be left to navigate an unpredictable trade environment that may entirely reshape how beauty moves across borders.
“Our industry is affected, big and small. People will adjust. There's going to be a lot of pain, a lot of extra unnecessary costs, a lot of disruption, a lot of changes,” said Praznik. “We're in the early days of what is a big reorganization.”