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🇰🇷 South Korea /Economy & Trade

Canada-US Tariff War May Benefit South Korean Cosmetics

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Canada will impose retaliatory tariffs of up to 50% on about $20 billion worth of U.S. products, including cosmetics, starting next month.
  • This move is a response to the U.S. imposing 50% tariffs on $20 billion of Canadian goods, also including cosmetics.
  • The trade dispute is expected to impact the global cosmetics industry, potentially benefiting South Korea as a major U.S. supplier if Canadian supply chains are disrupted.

A burgeoning trade dispute between the United States and Canada is poised to send ripples through the global cosmetics market, potentially reshaping production and distribution networks for major beauty companies. Canada announced it will impose retaliatory tariffs of up to 50% on approximately 700 U.S. product categories, totaling around $20 billion, effective July 8.

The tariffs will cause massive disruption to the supply chain.

— Darren PraznikThe president of the Canadian Cosmetic Association highlighted the significant impact the tariffs will have on the industry's distribution networks.

This measure directly counters the U.S.'s recent imposition of 50% tariffs on $20 billion of Canadian goods, which also included cosmetics. The inclusion of beauty products in both countries' tariff lists is expected to significantly affect the industry. Many global cosmetic firms operate highly integrated supply chains across Canada, the U.S., and Mexico, meaning price adjustments and shifts in production facilities or distribution strategies are likely.

Competitors will not be subject to tariffs, so companies that do bear the tariffs will see a significant hit to their bottom line.

— Darren PraznikThe president of the Canadian Cosmetic Association explained the competitive disadvantage faced by companies subject to the new tariffs.

Companies relying heavily on Canada as a production base may find the steep 50% tariff rate unsustainable in the long term. This situation could create an advantage for South Korea, currently the top supplier of cosmetics to the U.S. market. If Canada's supply chain faces significant disruption due to the tariffs, South Korean cosmetic exports to the U.S. could see a boost.

Many popular cosmetics are produced in Canada and exported to the US.

— Bryce GruberA beauty influencer warned followers about potential price increases due to the U.S.-Canada trade war, emphasizing the role of Canadian production.

Industry representatives anticipate major disruptions, with some Canadian cosmetic companies already facing increased costs due to U.S. customs blocking duty-free clearance for low-cost goods. Beauty influencers have warned consumers that prices for popular cosmetics, many produced in Canada for export to the U.S., are likely to rise. This could particularly impact the market for affordable products, potentially curbing impulse purchases.

A significant portion of L'Oréal products, which span from affordable to diverse brands, are produced in Canada.

— Bryce GruberThe beauty influencer pointed out that major brands like L'Oréal, with products manufactured in Canada, could be affected by the trade dispute.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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