On Wednesday, the US government made an announcement that the majority of global trading partners will face import tariffs, and many industry stakeholders highlighted that producing beauty and personal care products often requires input from a global supply chain, which could further complicate the situation.
From 5 April, for goods exported from the European Union into the US market, EU-based businesses can expect to face a 20% tariff, while for the European nations that aren’t in the EU, there were a variety of different tariffs set. For the UK this will be 10%; for Switzerland it will be 31%; for Liechtenstein 37%; for Iceland 30%; and for Norway 15%.
Certain cosmetics ingredients are exempt from tariffs
The US government has also published a list of products that are exempt from both the Global Tariff and Reciprocal Tariffs, which includes a host of ingredients that are regularly used in cosmetics products, as well as many pharmaceutical and nutraceutical ingredients.
According to a 37-page document, Annex II of the April 2 executive order, “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits”, some ingredients used in cosmetics and personal care formulations and product packaging are exempt from the import tariffs.
Which cosmetics and personal care ingredients are exempt from tariffs?
These include trending ingredients such as azelaic acid and benzoic acid, as well as the somewhat controversial mineral oils, which are used in a multitude of formulations.
Skin soother glycyrrhizin (liquorice) and its derivatives are exempt, as are various fatty acids and oils used for thickening and emollient properties, emulsifiers and stabilisers such as soya lecithin, active ingredients such as vitamins such as A, C, and E, and peptides and protein derivatives.
Mineral sunscreen filters zinc oxide and titanium dioxide are also on the list, as are biopolymers.
The ‘clean beauty’ sector has a huge following in the US market and there are also many natural ingredients on the list that are used in ‘clean beauty’ products, such as natural emulsifiers from olive oil that offer anti-ageing and moisturising benefits as well as emollient and stabilisation purposes in formulations, natural waxes and emollients derived from plants that can be used to thicken, smooth and stabilise formulations, natural colourants and dyes, plus plant extracts and oil infusions, such as spent coffee grounds, which can serve as a natural abrasive in exfoliant formulations, offering texture and aromatherapy benefits.
There are also a host of ingredients that can be used in cosmetics formulations and potentially packaging materials, such as beeswax or carnauba wax, carboxymethyl-cellulose, sucrose esters, vegetable glycerin, and natural plant-based charcoals.
The list also includes synthetic polymers, biodegradable polyethylene or PLA (polylactic acid), as well as papyrus or bamboo (if derived from the appropriate HTSUS codes), which can be used in sustainable packaging.
The full list of exempt ingredients can be viewed here.
“Access to global markets is critical for the industry’s success”
Meanwhile, the US trade body for the beauty and personal care industry Personal Care Products Council (PCPC) has made an official statement in response to the news and highlighted that “access to global markets is critical for the industry’s success and our ability to invest in US manufacturing and highly skilled jobs.”
EVP global strategies at the PCPC Francine Lamoriello said: “We believe this can be best achieved by a combination of approaches that address the underlying factors leading to trade distortions and expanding export and investment opportunities that strengthen the ability of our members to compete around the world.”
Lamoriello said the PCPC is “concerned about trade policies that could result in higher prices for personal care products and impact the industry’s growth and global competitiveness.”
“The cosmetics and personal care products industry is a key driver of the U.S. economy, with over $68bn in US manufacturing and 4.6m US jobs,” she continued.
“Our industry directly contributes over $300bn to our nation’s GDP, and our products are essential to the daily lives of all US residents, with millions of consumers using about six to 12 products each day, including sunscreen, toothpaste, shampoo, moisturiser and fragrance.”
Going forward, Lamoriello said the PCPC maintained its support for “balanced trade policy approaches that would create US jobs and strengthen critical global market opportunities for our member companies and continue to work diligently to inform the Administration and Congress of the impact of U.S. trade policies on our industry, U.S. investments and consumers.”