Estee Lauder [Reuters]
Estee Lauder [Reuters]

As the US-Canada tariff war spills into the cosmetics sector, analysts say prices, production and distribution networks for beauty products sold in North America could all face disruption. The development is drawing particular attention from South Korea's K-beauty industry, which has been expanding its footprint in the North American market — last year, Canada ranked second only to South Korea among exporters to the US beauty and skincare market.

According to Bloomberg, the United States began imposing 50 percent tariffs on Canadian goods, including cosmetics, on Saturday (local time), while Canada announced it would retaliate with 50 percent tariffs on some American cosmetics starting Sept. 8.

The US and Canadian cosmetics industries are closely intertwined. A significant share of cosmetics produced in Canada is exported to the United States, and global beauty companies have long used Canada as a key production and logistics hub.

L'Oreal operates factories and distribution centers in Canada, and Estee Lauder also manufactures products there. Bloomberg said Estee Lauder's brands — including the cosmetics label M·A·C and skincare brand The Ordinary — may not be immune to the tariff impact.

Tariffs do not necessarily translate into immediate price increases, but analysts say companies would struggle to absorb a 50 percent rate over an extended period, raising the possibility of price adjustments or a restructuring of production and distribution networks.

Cosmetics are particularly vulnerable because many products are priced at around $10, a range where consumers tend to buy on impulse. Analysts warn that if tariffs push prices higher, that impulse-buying demand could shrink.


mokiya@heraldcorp.com