Beauty products among US goods affected by tariffs as China strikes back in trade war

By Amanda Lim contact

- Last updated on GMT

Beauty products among US goods affected by tariffs as China strikes back in trade war
China has hit back in the escalating trade war with the US by imposing tariffs of up to 25% on $60bn worth of US goods which include cosmetics, fragrances, and ingredients like mica powder and zinc oxide.

China announced its intention to impose additional tariffs on 5,207 items from the United States with four levels of tariffs – 5%, 10%, 20%, and 25%.

Cosmetics caught in crossfire

From coffee and cereal to biodiesel and leather hides, it seemed like no item was spared from additional taxation by the Chinese government.

Beauty products were among the goods that faced the heaviest tax penalty. Lipsticks, fragrances, and nail polishes will be subjected to an additional 25% tariff, so were popular beauty ingredients like cocoa butter and coconut oil.

Beauty-related goods in the second-highest 20% tier were items like hair brushes, face powders, and hair removal creams, as well as perfume bottle components and salicylic acid.

Commonly used cosmetic ingredients were included in the list as well. Mica powder, talc, zinc oxide, and titanium oxide are some that will be taxed an additional 10%.

China is currently the world’s second largest cosmetics market after the United States. China Cosmetics Market Report 2014-2017 reports that it is worth approximately 200bn yuan ($29.3m).

At this rate, American beauty brands stand to risk losing more market share as the new tariffs may cause Chinese consumers to shift away from them and to domestic brands or those from other regions such as South Korea or Europe.

Countermeasures and retaliation

China’s announcement came right after United States revealed its intention to penalise China by increasing the tariff rates on a proposed list of $200bn Chinese products from 10% to 25%.

In a statement by the Ministry of Finance (MOF), China called the United States out for its “serious violations”​ of rules set by the World Trade Organisation, which they said threatened to damage China’s national interests and the interest of its people.

A statement by a spokesperson on the Ministry of Commerce (MOC) website stated that the United States has forced China’s hand by repeatedly escalating the trade situation between them.

The online statement asserted that China’s countermeasures were considered rational and restrained.

“China has to take necessary counter measures to defend the country’s dignity and the interest of the people, defend free trade and the multilateral system, and defend the common interest of all the counties in the world,”​ the statement stressed.

The United States and China, the world’s two biggest economies, have been engaged in a fierce trade dispute for months. While the two nations have each other in their crosshairs, the interconnected nature of today’s world economy threatens to cause a ripple effect on other regions, including Asia.

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