Key Takeaways:US duties on imports are making actives, resins, and specialty chemicals more expensive across beauty supply chains.Global deal activity dropped by more than half in 2025, cooling valuations and delaying innovation flow into beauty.Suppliers are building local hubs, making locally sourced both a resilience strategy and a market advantage.Lipsticks, serums, sunscreens, and every other beauty product are a result of a cohesive and intricate global supply chain. Most beauty products rely on specialty chemicals and advanced materials sourced from every corner of the world. However, especially in 2025, that system is under pressure, if not under siege. The global chemical industry, which has long been a backbone for beauty innovation, is experiencing its weakest M&A activity in years. Coupled with sweeping tariffs and geopolitical uncertainty, this slowdown is reshaping how beauty brands think about sourcing, innovation, and long-term resilience.According to Young & Partners, just $19.8 billion in chemical deals closed in the first half of 2025, a sharp drop from the $45.3 billion completed in 2024. For context, 2023 saw 75 major transactions, but by mid-2025, that figure had decreased to 32. This matters for beauty because M&A is often how ingredient suppliers acquire cutting-edge technologies, expand into new regions, or streamline portfolios to focus on high-growth categories like personal care.The Tariff SqueezeTariffs have become the single biggest disruptor in the beauty supply chain. In April, the US imposed sweeping duties: 15% on imports from the EU, Japan, and South Korea; 20% on Southeast Asia; and 10% on smaller markets.