How the US-EU tariff deal may have an effect on Europe’s cosmetics {industry}

On Sunday 27 July, the US President Donald Trump introduced that he had made a cope with the European Fee President Ursula von de Leyen to scale back the beforehand introduced import tariff from 20% to fifteen% on EU items imported into the US market.

As a part of the agreed deal, the US can even require the EU to purchase $750bn (£560bn) value of oil, gasoline, nuclear gasoline and semi-conductors over the following three years, in addition to make investments $600bn (£446bn) within the US – together with purchases of navy gear.

In Might, the UK accepted tariffs of 10% in its commerce cope with the US, which many European leaders thought of to be a nasty deal. Nevertheless, the deal that has now been secured on behalf of EU companies seems to be one-sided in favour of the US.

“Annual lack of 300 million euros”

The French commerce physique Federation of Magnificence Firms (FEBEA) has mentioned whereas the commerce settlement between the European Union and the US is a “reduction” compared to earlier bulletins in April, general, it’s nonetheless “not settlement for the French cosmetics {industry}.”

“French cosmetics merchandise, which have been beforehand exempt from customs duties (0%), will now be taxed at 15% for exports to the US. Whereas this settlement places an finish to uncertainty, it poses a major risk to the competitiveness of the French cosmetics {industry},” says Emmanuel Guichard, who’s Basic Delegate of FEBEA.

The US is the main export marketplace for French cosmetics and in 2024 France despatched €3bn value of magnificence product exports (12% of its complete exports) to this market.

FEBEA mentioned that based mostly on analysis undertaken by financial specialist analysis agency Asterès, it’s now doable to estimate that the settlement “may result in an annual lack of 300 million euros and threaten as much as 5,000 jobs in France.”

“To cushion this shock and keep away from a stall in a context of reconfiguration of world commerce, the cosmetics {industry} is asking for the pressing implementation of competitiveness and simplification measures in Europe,” mentioned Guichard.

Dangers “additional eroding the competitiveness of the EU chemical {industry}”

In the meantime, the {industry} discussion board for the European chemical substances {industry} CEFIC agrees with FEBEA’s sentiment. It launched a press release saying that “Whereas the deal seems to have averted the worst-case state of affairs, the extra US tariffs on European exports threat additional eroding the competitiveness of the EU chemical {industry}.”

It added “that is one other reminder that the lately printed Chemical Trade Motion Plan must be urgently and absolutely applied. There is no such thing as a time to waste.”

The Chemical Trade Motion Plan was applied on 8 July as a bid to strengthen the competitiveness of the European chemical substances {industry}.

“Further tariffs hinder commerce and funding flows throughout the Atlantic,” continued CEFIC’s spokesperson, explaining how these further prices may probably influence more and more complicated, world provide chains. “That is extremely problematic for such an built-in transatlantic chemical {industry} with a major quantity of intra-industry and intra-company commerce. Uncooked and enter supplies are frequently being shipped forwards and backwards throughout the Atlantic, including worth at every stage of manufacturing.”

CEFIC nevertheless additionally highlighted that there’s a “proposed inclusion of sure chemical substances within the “zero-for-zero tariff” settlement”, which it known as “an encouraging sign.”

“But, helpful commerce phrases are wanted for all chemical substances,” continued the spokesperson. “We due to this fact name on either side to pursue a complete and balanced sectoral settlement that ensures beneficial commerce circumstances, will increase predictability and strengthens the competitiveness of our {industry}.”

Calls to diversify export markets

FEBEA mentioned that on Tuesday 22 July, the week earlier than Trump introduced the brand new commerce deal, 62 leaders of the cosmetics {industry} had already collectively signed an opinion piece devoted to French cosmetics based mostly on the next priorities:

• Innovation: guaranteeing entry to important and secure components to be used in cosmetics
• Digitisation of data on product packaging: modernising entry and transparency for shoppers
• Anti-counterfeiting: defending manufacturers and client security by preventing counterfeit merchandise (dupes).
• Diversification of export markets: mobilising commerce agreements which can be as many progress drivers (eg India, Indonesia) within the face of elevated world competitors

“We name on the authorities to behave at once to guard the cosmetics {industry}, the flagship of the French financial system whose place as a world chief is the results of many years of effort and funding,” Guichard concluded.

In the meantime, CEFIC’s spokesperson concluded: “As an export-oriented sector, we name on all EU policymakers to double down on the EU free commerce agenda to open new markets for EU chemical corporations.”