“As president, I will rebuild the greatest economy in the history of the world, just like we had it before…”
These words by Trump echoed throughout the 2024 election campaign, highlighting his vision of economic revitalization of the USA.
The campaign focused on industries like manufacturing and energy and discussed the then-presidential candidate’s plan for the US. Goes without saying that the $100 billion beauty industry will also be influenced by the new administration.
The US beauty industry is an important economic driver. It employs millions and shapes consumer behavior both domestically and internationally.
Now, with the coming new government, the sector is anticipating a transformative period.
The Role of Cosmetics in the US Economy
During his campaign, Trump emphasized, again and again, his key priorities in the economic sector. They are:
- Extending the 2017 tax cuts
- Reducing corporate tax rates
- Imposing tariffs on foreign products
These policies will work on supporting and strengthening domestic industries. It remains to be seen how they will treat the beauty sector, which relies heavily on global trades and stability.
The U.S. cosmetics industry offers over $4.6 million in direct and indirect jobs and contributes more than $203 billion in labor income. And despite the upheaval faced during the pandemic, the sector has shown a 15% increase in GDP contribution.
The sector holds promise and the power to boost the nation’s economy even further. We must remember, however, that growth is possible when there is clarity of rules and economic policies that enable growth.
How Trump’s Economic Policies Could Impact the Cosmetics Industry
Tariff Increases and Imports
The cosmetic sector imports a lot of its raw material and goods from countries all over the globe. So, the new president’s tariff policies on imported items may significantly affect the industry.
U.S. cosmetic products heavily depend on ingredients sourced from countries like South Korea, Canada, and France. Increased tariffs will raise costs for manufacturers, posing 2 concerns for the consumer.
- High chances of retail prices going up
- Manufacturers may try to reduce production costs, potentially impacting the quality of the product
On the other hand, these policies are set to embrace small and middle-sized companies of the country. They could also encourage domestic sourcing and production, creating a stronger national supply chain.
We may also see new companies come in, as the market demand and government support for them grows. As new businesses rise, there may be an increase in employment and affordable cosmetic lines due to reduced logistics costs.
Modernization of Cosmetics Regulation Act (MoCRA)
The Modernization of Cosmetics Regulation Act (MoCRA) of 2022 was the most significant move to extend the FDA’s authority. It mandated more involvement from the FDA, focusing on ingredient transparency and manufacturer reporting.
However, the progress is slow. In 2023, the FDA missed several deadlines, disappointing individuals and organizations alike.
As the Trump administration settles in, it is expected to start deregulating as promised.
It is natural to wonder whether MoCRA will also be impacted and how. Change in the act can again influence how consumer safety measures are implemented.
Another thing to see is how governing efficiency and public health priorities are balanced by the new administration.
Key Drivers that May Reshape The New Government’s Decisions
Economic Objectives
Reducing corporate taxes may incentivize domestic production, but the benefits may not be evenly distributed. Large corporations with extensive supply chains may benefit more than small- to medium-sized businesses.
This may push the administration to revamp their plan and work on balancing the needs of all sectors.
Public Health Concerns
Policies eventually revolve around consumer well-being, and when the public raises concerns, governments are motivated to act.
Legal cases like the hair relaxer lawsuit can change dynamics and bring attention to what consumers are saying. For example, with this suit, plaintiffs are not only pursuing rightful compensation but also aiming to hold the manufacturers accountable.
These companies have knowingly released harmful hair straightening products linked to cancers and other serious health issues, remarks TorHoerman Law. Such legal movements can influence how policymakers and manufacturers prioritize transparency in the industry.
It’s not just about drawing hefty compensations from responsible organizations but also bringing about policy changes and administrative evolution.
Global Competition
As nations around the world tighten cosmetics restrictions, eyes rest on the United States, awaiting its next steps for this industry.
This not only impacts revenue inside the country but also its global positioning as an exporter. For the U.S. to remain competitive, working on holding public trust while adapting policies will be essential.
As the new administration begins shaping economic policy, the cosmetics industry finds itself at an important turning point. From increases in tariffs to execution delays, every decision will affect jobs, consumer trust, and global competitiveness.
From innovation to pricing, a government’s decision can truly reshape how an entire sector engages with its customers. Whether it’s taxation, trade, or regulations, we are looking for a glimpse of the potential future of this billion-dollar industry.
These pivotal moments can set the course for years to come for an industry like beauty and personal care. For now, however, we can only wait and watch.