As tensions mount over global trade policies, the head of beauty giant L'Oréal is sounding the alarm over a looming tariff war that could significantly disrupt the cosmetics industry. Speaking out more pointedly than before, CEO Nicolas Hieronimus has urged US officials to exclude beauty products from expanded Trump-era tariffs, arguing the measures would unfairly harm European businesses.
The shift in tone from Hieronimus comes just weeks after he publicly downplayed the impact of such tariffs. But now, amid growing industry concern, he has joined executives from 15 other global beauty brands in pressing for an exemption—warning that punitive tariffs on cosmetics would do far more harm than good.
'Tariffs Penalise Europe'
Speaking to the Financial Times, Hieronimus said that if tariffs are imposed on the beauty sector, it would disproportionately impact European companies.
'If there is this tit-for-tat thing on beauty, it's going to penalise Europe much more than American businesses and companies,' he stated.
'My only ask to the people I've met [in Brussels] is to say: look at the balance of trade and don't put a red flag on a category where we have more to lose than to win.'
Cosmetics, including skincare products, perfumes, aftershaves, shampoos, and sunscreens, are among the categories listed in the European Union's 99-page retaliatory tariff document, which outlines levies on US goods in response to expanded trade penalties introduced by the Trump administration.
Initial Dismissal Of Tariff Concerns
Earlier this month, Hieronimus struck a far more relaxed tone when discussing the tariffs. Speaking to CNBC, he said L'Oréal had little to worry about since most of the products sold in the United States are manufactured domestically.
'Right now, there's no tariff on this category. Should there be one? Well, we will work around it. There's pricing power. There's also the currency effect. The dollar is stronger,' he remarked.
While Hieronimus previously downplayed the issue, the escalation in trade tension appears to have prompted a more proactive stance—particularly as L'Oréal seeks to protect market share and prevent supply chain disruptions across Europe and the US.
Strong 2024 Financial Results Buoy Confidence
Despite the uncertainty, L'Oréal delivered a strong financial performance in 2024, reporting sales of £36.36 billion (€43.48 billion)—a 5.1% like-for-like increase, even amid economic slowdowns, notably in China.
The company's Dermatological Beauty division led growth with over £5.85 billion (€7 billion) in revenue and a 9.8% like-for-like increase, largely driven by demand for skincare products. Operating profit hit £7.26 billion (€8.68 billion), marking a record 20% operating margin.
L'Oréal also rewarded shareholders by raising its dividend 6.1% to £5.85 (€7.00), while earnings per share grew 4.8% to £10.59 (€12.66). These gains, alongside the group's global presence and diversified product portfolio, have enabled it to outperform competitors amid market volatility.
Optimism For 2025, But With Caution
Looking ahead, Hieronimus expressed cautious optimism for the year to come, noting that global beauty market growth is 'normalising' following two years of high inflation.
'In the developed markets, this has been driven by a gradual easing in pricing... however, underlying market trends remain robust in Europe and North America—as well as in emerging markets,' he said.
Still, Hieronimus warned that while Europe is performing well, it remains bogged down by excessive regulation and a lack of innovation.
'My belief and hope, and that's what I perceive today when I meet European politicians, is that the new Trump administration and their focus on competitiveness will be the real push that was needed,' he told the Financial Times.
Why L'Oréal Wants A Beauty Tariff Exemption
L'Oréal's call to exempt beauty products from punitive tariffs is more than just a business plea—it reflects the broader challenges of maintaining competitive pricing and consumer access in a highly globalised industry. Tariffs on cosmetics and personal care items could lead to price increases, disrupted cross-border supply chains, and reduced profitability for brands and retailers alike.
By securing an exemption, L'Oréal hopes to shield consumers from rising costs, protect jobs, and sustain international demand—particularly as the global economy navigates inflation, geopolitical instability, and shifting regulatory landscapes.
With the beauty industry at a critical inflection point, the coming months will reveal whether policymakers are willing to work with major brands or risk igniting a trade war over lipstick, skincare and sunscreen.
Originally published on IBTimes UK
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