The US Tax Levy: beauty’s ticking time bomb

by | Jun 22, 2018

The EU Commission has confirmed that it will be imposing a tariff on imports of American cosmetics, Bourbon and American whiskey from today, in retaliation to president Donald Trump’s decision to impose a 25% tax on imports on steel.

In March, president Trump imposed a 25% import duty on steel and a 10% duty on aluminium in Europe, Mexico and Canada, claiming that such imports threatened its national security and put US jobs at risk. This week, the European Commission retaliated, confirming that it would be “rebalancing” import tariffs on certain US-made products into Europe in response to the sanctions.

Those products include ‘makeup’ which, to be more specific, covers ‘lip makeup preparations’, ‘eye makeup preparations’, ‘manicure or pedicure preparations’, ‘makeup or skincare powders including baby powders’ (but not medicated ones) and ‘cleansing or facial tissues and towels’.

The list of targeted goods (HERE in full) also includes American and Bourbon whiskey, motorbikes (that’ll be Harley Davidsons presumably), clothing like cotton underwear and trousers, certain footwear (including slippers – yes, we’re scratching our heads too), cigarettes and sunbeds.

The Commissioner For Trade, Cecilia Maelstrom said “this is a measured and proportionate response to the unilateral and illegal decision taken by the United States to impose tariffs on European steel and aluminium exports. What’s more, the EU’s reaction is fully in line with international trade law. We regret that the United States left us with no other option than to safeguard EU interests.”

The Distilled Spirits Council are “extremely concerned” by the growing trade tensions between the US and the ROW, as is the British Beauty Council.  The impact that retaliatory tariffs could have on US producers, their agricultural and supply chain partners, not to mention British businesses, workers and consumers.  In the beauty sector, many of us are wondering what the impact of the tariff will be and how the tariff will be carved up and redistributed by beauty companies and e-comm outfits.

We will bring you more updates on this as we can.

**Update 25th June 2018**
The Cosmetics Toiletries & Perfumers Association (CTPA) advise us that they have been “extensively working on this since the first notification and has been coordinating with the UK Government BEIS/DIT) and our European and international colleagues.  We have managed to move lip and some fragrance ingredients to the second priority list”. 

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