What Tariff Laws Mean for Cosmetics and Personal Care Brands in the U.S.

The current tariff situation represents more than just a temporary inconvenience—it signals a fundamental shift in global trade relationships that could permanently alter how cosmetics and personal care products are manufactured, priced and distributed.

“These announcements are constantly evolving, seemingly by the hour, making it increasingly difficult for companies to strategize and plan accordingly,” said Lucas Rock, an associate at ArentFox Schiff, in a recent industry publication.

What’s at Stake for Beauty Brands

The tariff impact extends across the entire beauty ecosystem, but some areas face greater exposure:

• Raw materials and ingredients: Essential oils, plant extracts and specialty chemicals often sourced from global suppliers
• Packaging components: Bottles, pumps, tubes and decorative elements frequently manufactured in China
• Finished products: Particularly for white label goods, where manufacturing often occurs in lower-cost regions
• Testing and development tools: Equipment and technology used in product formulation and testing

According to recent NielsenIQ data, over 25,000 products in the U.S. mass beauty market—primarily from China—may face price increases if tariffs expand further. 

Cosmetics and beauty care products represent the most vulnerable category of goods, with more than 11,000 products at risk.

While all beauty companies will feel the impact of tariffs, white label cosmetic manufacturers and brands carry distinctive vulnerabilities. Smaller brands in particular may have difficult making adjustments and pivots to their supply chains and sourcing relationships. 

Margin Constraints

White label business models typically operate on thinner margins than their premium counterparts. With retail prices often 30-50% lower than equivalent branded products, these companies have less financial buffer to absorb additional costs without passing them to consumers.

A white label moisturizer that costs $3.25 to produce and retails for $9.99 may see production costs rise to $4.05 under a 25% tariff scenario—reducing profit margins from 38% to 25% if retail prices remain unchanged.

Price Sensitivity

The primary competitive advantage for most white label products is affordability. Their customer base tends to be more price-sensitive, making it difficult to pass on cost increases without losing market share. 

Often, price increases of more than 8-10% typically trigger noticeable shifts in consumer purchasing behavior in mass beauty categories.

Supply Chain Complexity

Many white label manufacturers operate with complex, just-in-time supply chains spanning multiple countries. 

A lipstick might combine pigments from China, for example, oils from Southeast Asia, packaging from Mexico and final assembly in the U.S.—creating multiple points of tariff vulnerability for a single product.

Limited Negotiating Power

Unlike major brands with substantial bargaining power, smaller white label manufacturers often lack the leverage to negotiate favorable pricing with suppliers when costs increase. 

This disadvantage compounds the impact of tariff-related price hikes throughout the supply chain.

The implications of tariffs extend well beyond the immediate cost increases on imported goods. 

Beauty companies must also contend with looming obstacles that may or may not have short-term workarounds, depending on the market, product and brand’s positioning in the marketplace. 

Supply Chain Bottlenecks

As cosmetics brands rush to secure inventory before tariff implementation dates or seek alternative suppliers, congestion throughout the supply chain becomes inevitable. This pressure manifests as:

• Extended lead times for raw materials and packaging
• Shipping delays and increased logistics costs
• Warehousing challenges as companies attempt to stockpile inventory
• Quality control issues when rapidly switching to new suppliers

Product Development Disruptions

The uncertainty surrounding tariffs complicates new product development in several ways:

• Hesitation to launch products with uncertain cost structures
• Reformulation requirements to replace ingredients from tariffed regions
• Packaging redesigns to accommodate new material sources
• Delays in market entry due to supply chain reorganization

“The tariff climate is forcing brands to rethink their entire product development cycle,” said Lindsay Nahmiache, CEO of Veriphy Skincare. “We’re returning to a ‘less is more’ era, where effectiveness and simplicity will win over hundreds of SKUs.”

Consumer Behavior Shifts

As tariffs drive price increases across beauty categories, consumer purchasing patterns will inevitably evolve:

• Trading down from premium to mass-market products
• Reducing the number of products in daily routines
• Increased interest in multipurpose products offering greater value
• Growing preference for “Made in USA” products perceived as tariff-proof

According to trends from previous periods of economic uncertainty, beauty consumers often modify their purchasing behavior when faced with price increases, with mascara, lipstick and skincare staples typically the most resistant to trading down.

Facing these challenges, cosmetics and personal care companies have several strategic options. 

Many of these strategic approaches are smart moves regardless of the tariff landscape: in the future, disruptions to supply chain and operations may occur more and more frequently, which means agility in all forms is key. 

Diversify Manufacturing Footprint

Brands relying heavily on regions subject to tariffs should consider geographical diversification:

• Nearshoring: Shifting production to Mexico (despite potential tariffs) may still prove cost-effective due to lower shipping costs and faster turnaround times
• Regional hubs: Establishing manufacturing capabilities in multiple regions to serve different markets
• Strategic partnerships: Collaborating with existing U.S.-based manufacturers to expedite production transitions

Again, small cosmetics brands may be at a disadvantage here, as they may lack the resources and buying power to completely change their product development processes on the fly. 

Shifting production to new locations may be a solution, but it also might be what prevents some brands from continuing to grow. 

Reformulate and Redesign

Product reformulation offers another path to tariff mitigation:

• Substitute ingredients from tariffed regions with domestic or tariff-free alternatives
• Redesign packaging to utilize locally available components
• Develop concentrated formulations that require less product per use, maintaining value perception
• Create multipurpose products that deliver greater consumer value

Reformulating products can be a complex endeavor, but leveraging data-focused tools like product lifecycle management (PLM) solutions can make this process streamlined at every stage. 

Strategic Pricing Approaches

Rather than implementing across-the-board price increases, savvy brands are exploring nuanced pricing strategies:

• Selective increases: Raising prices on less price-sensitive items while maintaining key entry-level products
• Bundle offerings: Creating value sets that maintain perceived value despite individual price increases
• Subscription models: Locking in customers at current pricing through subscription programs
• Size adjustments: Modifying package sizes to maintain price points while adjusting unit economics

Leverage Technology for Supply Chain Optimization

Digital tools and advanced analytics have become essential for navigating tariff complexities:

• Scenario planning: Modeling various tariff scenarios to develop contingency plans
• Supplier diversification: Using digital platforms to identify and qualify new supplier partners
• Inventory optimization: Employing predictive analytics to balance inventory levels against tariff implementation timelines
• Cost monitoring: Implementing real-time tracking of component costs across global suppliers

Despite the challenges, white label manufacturers possess several unique advantages that can be leveraged during this period of disruption.

Formulation Flexibility

Unlike major brands with established product identities, white label manufacturers typically have greater flexibility to reformulate without consumer backlash. 

This adaptability allows them to pivot more quickly to domestically-sourced ingredients or packaging components.

Made in USA Marketing Potential

As tariffs potentially drive up prices for imported products, white label brands manufacturing domestically gain a compelling marketing narrative. 

A 2022 survey from RetailBrew indicated that 72% of consumers “seek out” USA-made goods and nearly half would be willing to spend “10–20% more” on goods that were made in the U.S.

Retailer Relationships

Many white label manufacturers maintain close relationships with cosmetic retailers and partners, creating opportunities for collaborative approaches to tariff challenges. 

These could include:

• Joint inventory planning to minimize tariff exposure
• Co-development of alternative product formulations
• Shared investment in domestic manufacturing capabilities
• Transparent cost discussions to maintain mutually beneficial margins

Agile Decision-Making

Smaller white label companies typically benefit from more streamlined decision-making processes than multinational conglomerates, allowing them to respond more quickly to changing tariff landscapes. This agility becomes a competitive advantage when rapid adaptation is required.

While immediate responses to tariff implementation are necessary, forward-thinking beauty brands are simultaneously developing longer-term strategies to build supply chain resilience:

1. Vertical Integration

Some manufacturers are exploring vertical integration to reduce tariff exposure:

• Investing in domestic ingredient production facilities
• Developing in-house packaging manufacturing capabilities
• Acquiring suppliers of critical components
• Building dedicated logistics networks

2. Product Lifecycle Management (PLM) Implementation

Comprehensive PLM systems provide the visibility and control needed to navigate complex tariff environments:

• End-to-end supply chain transparency
• Real-time cost monitoring and scenario planning
• Accelerated product development to respond to market changes
• Simplified compliance management amid changing trade regulations

3. Collaborative Industry Approaches

Industry associations are facilitating collaborative responses to tariff challenges:

• Shared manufacturing facilities for smaller brands
• Joint lobbying efforts for tariff exemptions on critical beauty components
• Knowledge-sharing platforms for domestic supplier identification
• Collective research into sustainable, locally-available ingredients

4. Consumer Education Initiatives

Progressive brands are proactively educating consumers about the value proposition behind potential price adjustments:

• Transparency about supply chain challenges
• Education about product quality and ingredient sourcing
• Communication about investments in domestic manufacturing
• Emphasis on sustainability benefits of localized production

The beauty industry has historically demonstrated remarkable resilience through economic challenges. Although the concept of rising prices and shifting trade policies can be volatile, it can also be a time of great learning and adaptation. 

For white label manufacturers and brands, these tariff challenges may ultimately drive positive transformations:

• More diverse and resilient supply chains
• Increased domestic manufacturing capabilities
• Accelerated innovation in formulation and packaging
• Greater transparency with consumers about sourcing and pricing

The companies that approach these challenges strategically—with an emphasis on agility, transparency and innovation—will not merely survive this period of disruption but may emerge stronger and more competitive.

As the beauty industry navigates this complex tariff landscape, digital transformation emerges as a critical enabler of success. 

The ability to model scenarios, track costs in real-time and rapidly adjust product development processes has moved from competitive advantage to business necessity. Product lifecycle management systems provide the comprehensive visibility and control needed to thrive amid trade uncertainties. 

By centralizing product data, streamlining supplier communication and enabling rapid scenario planning, Centric Software® empowers beauty brands to make informed decisions in an increasingly volatile environment.

Our platform is specifically designed to help beauty and personal care companies adapt quickly to changing regulatory environments while accelerating product innovation—a critical combination in today’s challenging trade landscape