French Beauty Industry Faces Direct Hit from New 15% U.S. Tariff
On July 27 (local time), the United States and the European Union agreed to impose a 15% tariff on most EU-exported goods. Compared to the original plan by the Trump administration to impose up to 30% tariffs starting August 1, this represents a reduction. However, the impact varies significantly by industry, and the French perfume and cosmetics sectors are expected to suffer the most from this decision.The French Federation of Beauty Companies (FEBEA) warned that this new tariff could result in an annual sales loss of approximately €300 million and threaten up to 5,000 jobs. French beauty products, which had previously enjoyed strong demand in the U.S. based on their luxury brand image, now face unavoidable price hikes, which may lead to reduced consumption.
During the negotiation process between the EU and the U.S., strategic industries such as aerospace and automobiles were granted exemptions or reduced tariff rates. In contrast, the beauty sector was excluded from the priority list and became subject to full tariffs. This has sparked strong opposition from both the French government and the industry, especially since cosmetics represent not just an export item but a national symbol of France.
French beauty brands have already been experiencing difficulties due to declining sales in China, and the additional burden of tariffs in the U.S., another key export market, could act as a double blow. In response, some large companies are considering expanding or relocating production facilities to the U.S. For example, LVMH has announced plans to build a second Louis Vuitton factory in Dallas, Texas, by early 2027, in an effort to mitigate the impact of the tariffs.
While expanding local production may serve as a short-term solution for the U.S. market, it also presents a new risk: the potential weakening of brand identity and premium image tied to being “Made in France.” As a result, the French beauty industry is now facing the dual challenge of navigating tariff pressures and repositioning itself within a shifting global market.
Hopes Rise for End of China’s Hallyu Ban, A Spring Breeze for K-Beauty?
As the Asia-Pacific Economic Cooperation (APEC) summit scheduled for late October in Gyeongju approaches, expectations are mounting for the potential lifting of China’s Hallyu ban (known as “Hanhanryeong”). Analysts attribute this outlook to changing international dynamics, including the nearing finalization of tariff negotiations between the U.S. and China and growing incentives for global leaders to revisit long-standing diplomatic frictions.Kim Doo-eon, a researcher at Hana Securities, noted, “As major nations prepare to meet at the APEC summit, there’s motivation to share updated geopolitical realities and establish new rules amid the prolonged U.S.-China rivalry. This sets the stage for the possible easing of the Hallyu ban.”
The Hallyu ban was implemented unofficially in 2016 following South Korea’s deployment of the THAAD missile defense system, resulting in China suppressing the distribution and promotion of Korean pop culture and related industries. This ban has lasted for nine years and, according to the Peterson Institute for International Economics, caused approximately ₩16 trillion ($12 billion) in economic losses for South Korea, with an estimated $6.7 billion impact on the tourism industry alone.
However, signs of a shift in tone between South Korea and China have begun to appear. Group tours from Korea to China resumed for the first time since the pandemic, and in May 2025, discussions surfaced about a K-POP group, EPEX, potentially performing in China. Although the concert was indefinitely postponed due to local circumstances, the mere possibility of such an event reflected a departure from previous restrictions.
Should the Hallyu ban be lifted, the Korean stock market is expected to benefit significantly, particularly sectors such as entertainment, cosmetics, and duty-free retail. Hana Securities identified companies with strong market capitalization and anticipated net profit growth, whose current valuations are significantly below their yearly highs. In cosmetics, Cosmax stands out; in entertainment, HYBE; and in duty-free retail, Lotte Shopping is a key player.
Kim further highlighted the potential surge in Chinese tourists should the ban be lifted, noting that this could drive growth in duty-free shopping where Korean won-denominated stablecoins might be used for transactions. Companies like Hotel Shilla and Kakao Pay, which are partnered with China’s dominant payment platforms Alipay and WeChat Pay, are seen as particularly well-positioned to capitalize on this development.
Still, short-term investment strategies should consider seasonal market adjustments. Historically, KOSPI and KOSDAQ indices have shown average returns of -1.2% and -1.5% respectively in August, attributed to seasonal volatility. In addition, concerns remain over potential declines in corporate revenue following the U.S.-EU tariff agreement, and lowered expectations surrounding the Lee Jae-myung administration’s tax reform plans.
Despite these headwinds, Hana Securities maintains a long-term optimistic view. “If a correction occurs, it’s likely to be modest—around 7% on average, similar to past market pullbacks,” said Kim. “As we approach the APEC summit, now is the time to prepare for a potential rebound led by existing market leaders and the easing of the Hallyu ban.”
MFDS Expands Global Reach Through Active Regulatory Diplomacy for K-Beauty
South Korea’s Ministry of Food and Drug Safety (MFDS), led by Commissioner Oh Yoo-kyung, is stepping up its efforts in regulatory diplomacy to enhance K-beauty’s global export competitiveness. As a full member of the International Cooperation on Cosmetics Regulation (ICCR), the MFDS participated in its 19th Annual Meeting held in Canada from July 8 to 10, the agency announced on the 15th.Established in 2007, the ICCR works to align international regulations and minimize barriers between countries in the cosmetics sector. South Korea became a full member in December 2020 and even served as chair country from July 2021 to June 2022.
At this year’s annual meeting, the MFDS shared updates on recent revisions to Korean cosmetic regulations, including the introduction of mandatory ingredient labeling for small-sized products. The working groups also delved into regulatory approaches for ingredient safety assessment integration strategies and e-labeling practices, engaging deeply with representatives from the cosmetics industry.
In 2023, the MFDS amended the Enforcement Rules of the Cosmetics Act, requiring that products 50mL (or 50g) and under display full ingredient lists and usage warnings, strengthening transparency and safe usage for consumers of small-volume cosmetics.
The meeting also presented a key opportunity for bilateral diplomacy. With growing interest in K-beauty across Latin America, the MFDS held bilateral discussions with Brazil’s National Health Surveillance Agency (ANVISA). The two sides agreed to explore signing a Memorandum of Understanding (MOU) and launching a high-level cooperation dialogue aimed at building practical and strategic partnerships in the near future.
In addition, the MFDS is planning a cooperation meeting with China’s National Medical Products Administration (NMPA) in September, aimed at harmonizing regulations related to safety data submissions, a major hurdle for Korean companies entering the Chinese market.
Furthermore, the Philippines’ Food and Drug Administration (PH-FDA) has requested support from the MFDS to benchmark Korea’s functional cosmetics system. In response, the MFDS plans to conduct a training program and technical support sessions for Filipino regulatory reviewers on-site in the Philippines this November. This initiative is expected to significantly facilitate Korean exports to the Philippines by fostering mutual trust.
The MFDS emphasized that it “will continue to bolster international trust in Korea’s cosmetic safety standards and actively support policies to enhance K-beauty’s global competitiveness through proactive regulatory diplomacy.” These efforts are not just about lowering export barriers, they are also key steps toward international standardization of Korean regulations and broadening global recognition of K-beauty’s scientific credibility.
First Official “Cosmetics Day” Marks New Chapter for Korea’s Beauty Industry
In March this year, South Korea’s National Assembly passed a revision to the Cosmetics Act designating September 7 as “Cosmetics Day”. With 2025 marking the first year this day is celebrated as a national commemorative event, the details of the inaugural celebration have been announced, drawing considerable interest.On July 22, the Korea Cosmetic Association announced that it will co-host the 2025 Cosmetics Day Ceremony on September 5 at COEX Square Ballroom A in Seoul, alongside the National Assembly K-Beauty Forum and the Ministry of Food and Drug Safety (MFDS). The official ceremony will commemorate the enactment date of the Cosmetics Act, September 7, and approximately 200 guests from the government, industry, consumer groups, and academia are expected to attend.
The event will be held under the slogan, “K-Cosmetic, Coloring the World,” and aims to showcase the global achievements of Korea’s cosmetics industry while laying out future innovation strategies. It also seeks to boost morale among industry workers and foster stronger engagement with consumers.
The ceremony will begin with a keynote speech by the MFDS Commissioner, followed by government commendations for contributors to the cosmetics industry and a presentation of appreciation plaques by the president of the Korea Cosmetic Association. The event will also feature welcome addresses and celebratory performances, creating a festive and meaningful atmosphere.
In addition to the ceremony, a series of industry-focused sub-events will take place throughout the day. The event lobby will host an exhibition on the 80-year history of Korea’s cosmetics industry, while Square Ballroom A will feature a forum on the latest research trends in AI-driven and personalized cosmetics technologies.
Meanwhile, Square Ballroom B will host two seminars: a morning session on U.S. cosmetics regulations and inspection response strategies for companies aiming for global expansion, and an afternoon session on sustainable packaging trends and response strategies. These programs are designed to support industry-wide knowledge sharing and competitiveness.
Starting in early August and running through the end of September, nine leading cosmetics companies, including Amorepacific, LG Household & Health Care, Aekyung Industrial, Shinsegae International, VT Cosmetics, Dermafirm, Korea Cosmetic, UCL, and Iljin Cosmetic, will conduct nationwide promotional and discount events. These initiatives aim to raise consumer awareness and stimulate domestic demand.
Notably, the original idea for Cosmetics Day dates back to 2003, when the Korea Cosmetic Association proposed the creation of a national day to strengthen Korea’s cosmetics industry and boost domestic consumption. Initially, March 3 was suggested to symbolize a “fresh start,” and various events were held around that time, including international exhibitions and consumer outreach programs. However, due to scheduling conflicts with other events like Samgyeopsal Day and industry meetings, the celebrations were scaled back and eventually discontinued after 2013.
In 2024, as Korea’s cosmetics exports surpassed the $10 billion mark, momentum to formalize the day resumed. The commemorative date was officially set as September 7, the anniversary of the Cosmetics Act, aligning the celebration with the industry’s legal and historical roots. The Korea Cosmetic Association has since pledged to collaborate with the National Assembly, government agencies, and related institutions to use Cosmetics Day as a platform for enhancing both innovation and safety across the cosmetics ecosystem, while raising public awareness of the industry’s significance.
Vice President Yeon Jae-ho of the Korea Cosmetic Association stated, “The designation of Cosmetics Day is a historic milestone that recognizes the social and economic value of K-beauty. The September 5 ceremony will serve as both a retrospective on the past 80 years and a launchpad for the next 100.”
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