How South Korea’s K-beauty industry is being hit by Trump tariffs

Osmond ChiaBusiness reporter, BBC NewsGetty ImagesCars and smartphones might rank amongst South Korea’s largest exports to the US, however few items encourage a extra devoted following than the Asian nation’s magnificence merchandise.Ok-beauty – a time period that covers a variety of skincare, make-up and cosmetics from South Korea – is lauded for its high quality and worth, driving hovering demand in recent times.The worldwide enchantment of South Korean tradition has additionally helped propel the recognition of its cosmetics.US-based Pearl Mak tells the BBC that she was launched to Ok-beauty merchandise by her pals. South Korean serums are better-suited for her pores and skin in comparison with some Western manufacturers that are typically extra harsh, the 27-year-old graphic designer says.Now “95% of my skincare is made up of Ok-beauty merchandise”, she provides.Ms Mak isn’t alone in her choice for South Korean skincare manufacturers. Individuals spent as a lot $1.7bn (£1.3bn) on Ok-beauty merchandise in 2024, in keeping with trade estimates. That marks a greater than 50% rise in comparison with the earlier yr.Ok-beauty merchandise are sometimes extra attractively priced than their Western counterparts – but additionally function substances that aren’t as generally discovered within the West – from heartleaf to snail mucin. US President Donald Trump has now imposed a 15% import tax on South Korean items traded between Seoul and Washington. It is lower than the 25% levy that Trump had threatened, however many shoppers should not taking any probabilities. US Ok-beauty retailer Santé Model noticed orders spike by almost 30% in April, proper after Trump unveiled sweeping US import taxes on many of the world.”When the tariff bulletins hit, prospects obtained strategic with how they have been going to climate the storm,” Santé Model’s founder Cheyenne Ware informed the BBC. “Customers are making ready in opposition to the uncertainty.”One other Ok-beauty retailer, Senti Senti, has been ordering extra merchandise since Trump began his tariff threats, says supervisor Winnie Zhong. This week, she acquired alerts from suppliers urging retailers to “top off earlier than tariffs”.Each retailers mentioned costs of Ok-beauty merchandise are prone to improve because the levies push up prices throughout the trade.”Anybody telling you costs will keep flat by way of the subsequent two years is naive,” says Ms Ware.Costs are sure to rise, particularly for smaller sellers of magnificence merchandise on platforms like Amazon, who function with slim revenue margins, economist Munseob Lee from the College of California San Diego says.Regardless of larger costs, the worldwide recognition of South Korean tradition means Ok-beauty merchandise are prone to stay in demand within the US, he says.”Informal consumers may be turned off by the upper worth, however followers will not discover a straightforward substitute.”Ms Zhong agrees. She thinks prospects will nonetheless need to purchase Ok-beauty merchandise however worth rises might imply they buy fewer gadgets than earlier than.Increased costs are unlikely to cease Ms Mak shopping for her favorite merchandise.”It depends upon how a lot the value shoots up, however as of now, I’m prepared to pay extra to buy the identical merchandise,” she says.’No simple substitute’Massive Ok-beauty manufacturers are in a significantly better place to soak up the price of tariffs than their smaller rivals, says South Korea-based enterprise advisor Eyal Victor Mamou.These bigger firms will be capable to keep away from main worth rises for his or her prospects as they’ve larger revenue margins, he says.However smaller Ok-beauty companies that make their merchandise in South Korea will wrestle to maintain a lid on prices, Mr Mamou provides.”It can take a while to take impact since most items being bought within the short-run have already been commissioned at present costs, however we’ll see it play out quickly.” Getty ImagesThe world enchantment of Ok-beauty merchandise has been pushed by the recognition of South Korean cultureIn current days, President Trump has struck offers with Japan and the European Union that can see their exports to the US topic to the identical 15% tariffs as South Korea.Which means nations which might be dwelling to among the world’s largest cosmetics manufacturers face the identical levies because the Ok-beauty trade.Central to Trump’s commerce insurance policies is his ambition to see extra items being made in America.But it surely’s but to be seen whether or not or not it will imply US consumers change to American magnificence merchandise.Ms Mak says she would not see US-made merchandise as enticing options.”I do seek for American-made options typically, however I’ve but to search out any which might be as efficient as those I exploit. So I would not go for American merchandise but.”