From tariffs to counter "unfair trade" to duties over illegal immigration and fentanyl smuggling, President Donald Trump has unleashed a volley of threats since taking office, sparking fears of widening trade tensions.
The peculiarity of this tariff policy is that it is not based on a planned reindustrialization effort focused on strategic sectors. Instead, it appears to be a blunt instrument aimed at making an impression on the United States’ trading partners. Amid announcements, delays, and enacted measures, distinguishing between what has been done and what remains on the horizon can be challenging.
February 4: China tariffs take effect
On February 1, Washington unveiled a 25 percent tariff on Canada and Mexico imports, with a lower rate on Canadian energy resources, given their importance to American society. Chinese goods faced an additional 10 percent duty.
Hours before those levies were due to take effect on February 4, Trump agreed to pause the tariffs on Canada and Mexico for a month. But the Chinese duties took effect, prompting Beijing’s retaliation over a series of targeting U.S. products.
March 4: Canada, Mexico, China
Trump’s month-long pause expires March 4, and he affirmed Thursday that the proposed tariffs on Canada and Mexico would "go into effect, as scheduled."
On top of that, he said China would be charged an additional 10 percent tariff on this day.
He cited a lack of progress on the flow of drugs like fentanyl into the United States. China has pushed back on its alleged role in the deadly fentanyl supply chain, saying Beijing has cooperated with Washington and arguing that tariffs would not solve the drug problem.
Mexico, in turn, criticizes the United States for its lenient firearms sales policies, which contribute to the militarization of drug cartels.
In February, Trump also signed orders to impose 25 percent tariffs on US steel and aluminum imports from March 12, ramping up a long-promised trade war. The justification was to protect US steel and aluminum industries, on grounds that they have been "harmed by unfair trade practices and global excess capacity."
April 2: “reciprocal tariffs”
Trump has also inked plans for sweeping "reciprocal tariffs" that would hit all the U.S. trade partners from April 2. "Whatever they charge us, we’re going to charge them," President Trump said at a press conference in Washington.
The levies would be tailored to each US trading partner and consider the tariffs they impose on American goods, alongside taxes the White House sees as discriminatory, such as value-added taxes. Non-customs barriers, such as regulations, could also be taken into consideration.
In particular, Trump said "the European Union was formed to screw the United States" and signaled his intention to enforce a 25% tariff on European goods, without specifying the date.
Consequences for the cosmetics industry
It is difficult to predict what the long-term impact of these policies will be on the U.S. economy. In the short term, however, it is likely that the disruption of supply chains will lead to inflation, also forcing industry players to reduce their margins. In practice, it is likely that only part of the increase in customs duties will be passed on.
This was highlighted by key players in the European perfume industry, including Puig and Interparfums, during their annual results presentations. Consumption is expected to be lower in 2025 and margin pressures higher.
"We all agree that it will be a mediocre year," Philippe Bénacin, co-founder of Interparfums, told to French radio France Inter on Saturday, March 1, regarding the outlook for 2025.
Meanwhile, representatives of the Personal Care Products Council (PCPC), the U.S. cosmetics industry lobby, also express concerns about the impact of this trade policy on a highly successful sector.
"As we represent a vibrant, growing industry that markets beloved products to consumers around the world, the Personal Care Products Council has significant concerns with any policy that could increase consumer prices for beauty and personal care products and endanger jobs for U.S. workers," said , PCPC’s EVP, Global Strategies, Francine Lamoriello.
Despite the uncertainties surrounding what will be taxed and at what rate, cosmetics manufacturers in Europe, North America, and Asia must urgently assess their level of exposure, evaluate their global competitors’ positions, and determine their financial flexibility.
