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Japan Today
28-07-2025
- Business
- Japan Today
Tariffs threaten Asian beauty product boom in U.S.
By MAE ANDERSON When Amrita Bhasin, 24, learned that products from South Korea might be subject to a new tax when they entered the United States, she decided to stock up on the sheet masks from Korean brands like U-Need and MediHeal she uses a few times a week. 'I did a recent haul to stockpile,' she said. 'I bought 50 in bulk, which should last me a few months.' South Korea is one of the countries that hopes to secure a trade deal before the Aug. 1 date President Donald Trump set for enforcing nation-specific tariffs. A not-insignificant slice of the U.S. population has skin in the game when it comes to Seoul avoiding a 25% duty on its exports. Asian skin care has been a booming global business for a more than a decade, with consumers in Europe, North and South America, and increasingly the Middle East, snapping up creams, serums and balms from South Korea, Japan and China. In the United States and elsewhere, Korean cosmetics, or K-beauty for short, have dominated the trend. A craze for all-in-one 'BB creams' — a combination of moisturizer, foundation and sunscreen — morphed into a fascination with 10-step rituals and ingredients like snail mucin, heartleaf and rice water. Vehicles and electronics may be South Korea's top exports to the U.S. by value, but the country shipped more skin care and cosmetics to the U.S. than any other last year, according to data from market research company Euromonitor. France, with storied beauty brands like L'Oreal and Chanel, was second, Euromonitor said. Statistics compiled by the U.S. International Trade Commission, an independent federal agency, show the U.S. imported $1.7 billion worth of South Korean cosmetics in 2024, a 54% increase from a year earlier. 'Korean beauty products not only add a lot of variety and choice for Americans, they really embraced them because they were offering something different for American consumers,' Mary Lovely, a senior fellow at the Peterson Institute for International Economics, said. Along with media offerings such as 'Parasite' and 'Squid Game,' and the popularity of K-pop bands like BTS, K-beauty has helped boost South Korea's profile globally, she said. 'It's all part and parcel really of the same thing,' Lovely said. 'And it can't be completely stopped by a 25% tariff, but it's hard to see how it won't influence how much is sold in the U.S. And I think what we're hearing from producers is that it also really decreases the number of products they want to offer in this market.' Senti Senti, a retailer that sells international beauty products at two New York boutiques and through an e-commerce site, saw a bit of 'panic buying' by customers when Trump first imposed punitive tariffs on goods from specific countries, manager Winnie Zhong said. The rush slowed down after the president paused the new duties for 90 days and hasn't picked up again, Zhong said, even with Trump saying on July 7 that a 25% tax on imports from Japan and South Korea would go into effect on Aug. 1. Japan, the Philippines and Indonesia subsequently reached agreements with the Trump administration that lowered the tariff rates their exported goods faced — in Japan's case, from 25% to 15% — still higher than the current baseline of 10% tariff. But South Korea has yet to clinch an agreement, despite having a free trade agreement since 2012 that allowed cosmetics and most other consumer goods to enter the U.S. tax-free. Since the first store owned by Senti Senti opened 16 years ago, beauty products from Japan and South Korea became more of a focus and now account for 90% the stock. The business hasn't had to pass on any tariff-related costs to customers yet, but that won't be possible if the products are subject to a 25% import tax, Zhong said. 'I'm not really sure where the direction of K-beauty will go to with the tariffs in place, because one of the things with K-beauty or Asian beauty is that it's supposed to be accessible pricing,' she said. Devoted fans of Asian cosmetics will often buy direct from Asia and wait weeks for their packages to arrive because the products typically cost less than they do in American stores. Rather than stocking up on their favorite sunscreens, lip tints and toners, some shoppers are taking a pause due to the tariff uncertainty. Los Angeles resident Jen Chae, a content creator with over 1.2 million YouTube subscribers, has explored Korean and Japanese beauty products and became personally intrigued by Chinese beauty brands over the last year. When the tariffs were first announced, Chae temporarily paused ordering from sites such as a shopping platform owned by an e-commerce company based in Hong Kong. She did not know if she would have to pay customs duties on the products she bought or the ones brands sent to her as a creator. 'I wasn't sure if those would automatically charge the entire package with a blanket tariff cost, or if it was just on certain items,' Chae said. On its website, YesStyle says it will give customers store credit to reimburse them for import charges. At Ohlolly, an online store focused on Korean products, owners Sue Greene and Herra Namhie are taking a similar pause. They purchase direct from South Korea and from licensed wholesalers in the U.S., and store their inventory in a warehouse in Ontario, California. After years of no duties, a 25% import tax would create a 'huge increase in costs to us,' Namhie said. She and Greene made two recent orders to replenish their stock when the tariffs were at 10%. But they have put further restocks on hold "because I don't think we can handle 25%,' Namhie said. They'd have to raise prices, and then shoppers might go elsewhere. The business owners and sisters are holding out on hope the U.S. and Korea settle on a lower tariff or carve out exceptions for smaller ticket items like beauty products. But they only have two to four months of inventory in their warehouse. They say that in a month they'll have to make a decision on what products to order, what to discontinue and what prices will have to increase. Rachel Weingarten, a former makeup artist who writes a daily beauty newsletter called 'Hello Gorgeous!,' said while she's devoted to K-beauty products like lip masks and toner pads, she doesn't think stockpiling is a sound practice. 'Maybe one or two products, but natural oils, vulnerable packaging and expiration dates mean that your products could go rancid before you can get to them,' she said. Weingarten said she'll still buy Korean products if prices go up, but that the beauty world is bigger than one country. 'I'd still indulge in my favorites, but am always looking for great products in general,' she said. Bhasin, in Menlo Park, California, plans to keep buying her face masks too, even if the price goes up, because she likes the quality of Korean masks. 'If prices will go up, I will not shift to U.S. products,' she said. 'For face masks, I feel there are not a ton of solid and reliable substitutes in the U.S.' © Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
Japan Today
12-05-2025
- Business
- Japan Today
U.S. businesses that rely on Chinese imports express relief and anxiety over tariff pause
FILE - Shipping containers are seen ready for transport at the Guangzhou Port in the Nansha district in southern China's Guangdong province on Thursday, April 17, 2025. (AP Photo/Ng Han Guan) By MAE ANDERSON and ANNE D'INNOCENZIO American businesses that rely on Chinese goods reacted with muted relief Monday after the U.S. and China agreed to pause their exorbitant tariffs on each other's products for 90 days. Importers still face relatively high tariffs, however, as well as uncertainty over what will happen in the coming weeks and months. Many businesses delayed or canceled orders after President Donald Trump last month put a 145% tariff on items made in China. Now, they're concerned a mad scramble to get goods onto ships will lead to bottlenecks and increased shipping costs. The temporary truce was announced as retailers and their suppliers are looking to finalize their plans and orders for the holiday shopping season. 'The timing couldn't have been any worse with regard to placing orders, so turning on a dime to pick back up with customers and our factories will put us severely behind schedule,' said WS Game Company owner Jonathan Silva, whose Massachusetts business creates deluxe versions of Monopoly, Scrabble and other Hasbro board games. Silva said the 30% tariff on Chinese imports still is a step in the right direction. He has nine containers of products waiting at factories in China and said he would work to get them exported at the lower rate. U.S. Trade Representative Jamieson Greer said the U.S. agreed to lower its 145% tariff rate on Chinese goods by 115 percentage points, while China agreed to lower its retaliatory 125% rate on U.S. goods by the same amount. The two sides plan to continue negotiations on a longer-term trade deal. National Retail Federation President and CEO Matthew Shay said the move was a 'critical first step to provide some short-term relief for retailers and other businesses that are in the midst of ordering merchandise for the winter holiday season.' The news sent the stock market and the value of the dollar soaring, a lift that eluded business owners confronting another dizzying shift. Marc Rosenberg, founder and CEO of The Edge Desk in Deerfield, Illinois, invested millions of dollars to develop a line of $1,000 ergonomic chairs but delayed production in China that was set to begin this month, hoping for a tariff reprieve. Rosenberg said it was good U.S.-China trade talks were ongoing but that he thinks the 90-day window is 'beyond dangerous' since shipping delays could result in his chairs still being en route when the temporary deal ends. 'There needs to be a plan in place that lasts a year or two so people can plan against it,' he said. Jeremy Rice, the co-owner of a Lexington, Kentucky, home-décor shop that specializes in artificial flower arrangements, said the limited pause makes him unsure how to approach pricing. About 90% of the flowers House uses are made in China. He stocked up on inventory and then paused shipments in April. 'Our vendors are still kind of running around juggling, not knowing what they're gonna do,' Rice said. 'We ordered in what we could pre-tariff and so there's stock here, but we're getting to the point now where there's things that are gone and we're going to have to figure out how we're gonna approach it.' 'There's no relief,' he added. 'It's just kind of like you're just waiting for the next shoe to drop.' Before Trump started the latest U.S. tariff battle with China, Miami-based game company All Things Equal was preparing to launch its first electronic board game. Founder Eric Poses said he spent two years developing The Good News Is..., a fill-in-the-blank game covering topics like politics and sports. He plowed $120,000 into research and development. When the president in February added a 20% tariff on products made in China, Poses started removing unessential features such as embossed packaging. When the rate went up to 145%, he faced two options: leave the goods in China or send them to bonded warehouses, a storage method which allow importers to defer duty payments for up to five years. Poses contacted his factories in China on Monday to arrange the deferred shipments, but with his games still subject to a 30% tariff, he said he would have to cut back on marketing to keep the electronic game priced at $29.99. With other businesses also in a rush to get their products, he said he is worried he won't be able to his into shipping containers and that if he does, the cost will be much more expensive. 'It's very hard to plan because if you want to go back to production in a couple of months, then you're worried about what will the tariff rate be when it hits the U.S. ports after that 90-day period,' Poses said. Jim Umlauf's business, 4Knines, based in Oklahoma City, makes vehicle seat covers and cargo liners for dog owners and others. He imports raw materials such as fabric, coatings and components from China. Umlauf said that even with a lower general tariff rate, it's hard for small businesses to make a profit. He thinks the U.S. government should offer small business exclusions from the tariffs. 'I appreciate any progress being made on the tariff front, but unfortunately, we're still far from a real solution — especially for small businesses like mine,' Umlauf said. 'When tariffs exceed 50%, there's virtually no profit left unless we dramatically raise prices — an option that risks alienating customers.' Zou Guoqing, a Chinese exporter who supplies molds and parts to a snow-bike factory in Nebraska as well as fishing and hunting goods to a U.S. retailer in Texas, also thinks the remaining 30% tariff is too high to take comfort in. With the possibility Washington and Beijing will negotiate over the 20% tariff Trump imposed due to what he described as China's failure to stem the flow of fentanyl, Zou said he would wait until the end of May to decide when to resume shipments to the U.S. Silva, of WS Game Company, said he planned to begin placing his holiday season orders this week but won't be as bold as he might have been if the ultra-high tariff had been suspended for more than 90 day. 'We will order enough to get by and satisfy the demand we know will be there at the increased pricing needed, but until we get a solid foundation of a long-term agreement, the risks are still too high to be aggressive.' Didi Tang in Washington contributed to this report. © Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
