How South Korea’s Ok-beauty business is being hit by Trump tariffs

AUG 3 – Cars and smartphones could 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 soaring demand in recent years.

The world 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 mates. South Korean serums are better-suited for her pores and skin in comparison with some Western manufacturers that are usually extra harsh, the 27-year-old graphic designer says.

Now “95% of my skincare is made up of K-beauty products”, she provides.

Ms Mak will not be alone in her desire for South Korean skincare manufacturers. Americans spent as a lot $1.7bn (£1.3bn) on Ok-beauty merchandise in 2024, based on business estimates. That marks a greater than 50% rise in comparison with the earlier 12 months.

Ok-beauty merchandise are sometimes extra attractively priced than their Western counterparts – but additionally characteristic elements 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 goods traded between Seoul and Washington.

It’s lower than the 25% levy that Trump had threatened, however many shoppers are usually not taking any possibilities.

US Ok-beauty retailer Santé Brand noticed orders spike by practically 30% in April, proper after Trump unveiled sweeping US import taxes on a lot of the world.

“When the tariff announcements hit, customers got strategic with how they were going to weather the storm,” Santé Brand’s founder Cheyenne Ware advised the BBC.

“Consumers are preparing against the uncertainty.”

Another 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 “stock up before tariffs”.

Both retailers mentioned costs of Ok-beauty merchandise are more likely to improve because the levies push up prices throughout the business.

“Anyone telling you prices will stay flat through the next two years is naive,” says Ms Ware.

Prices 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 University of California San Diego says.

Despite larger costs, the worldwide reputation of South Korean tradition means Ok-beauty merchandise are more likely to stay in demand within the US, he says.

“Casual buyers might be turned off by the higher price, but fans won’t find an easy substitute.”

Ms Zhong agrees. She thinks prospects will nonetheless wish to purchase Ok-beauty merchandise however worth rises could imply they buy fewer objects than earlier than.

Higher costs are unlikely to cease Ms Mak shopping for her favorite merchandise.

“It depends on how much the price shoots up, but as of now, I am willing to pay more to purchase the same products,” she says.

Big Ok-beauty manufacturers are in a a lot better place to soak up the price of tariffs than their smaller rivals, says South Korea-based enterprise marketing consultant Eyal Victor Mamou.

These bigger corporations will have the ability to keep away from main worth rises for his or her prospects as they’ve larger revenue margins, he says.

But smaller Ok-beauty companies that make their merchandise in South Korea will battle to maintain a lid on prices, Mr Mamou provides.

“It will take some time to take effect since most goods being sold in the short-run have already been commissioned at current prices, but we’ll see it play out soon.”

In current days, President Trump has struck offers with Japan and the European Union that may see their exports to the US topic to the identical 15% tariffs as South Korea.

That means nations which might be residence to a number of the world’s largest cosmetics manufacturers face the identical levies because the Ok-beauty business.

Central to Trump’s commerce insurance policies is his ambition to see extra items being made in America.

But it’s but to be seen whether or not or not this can imply US consumers change to American magnificence merchandise.

Ms Mak says she doesn’t see US-made merchandise as engaging options.

“I do search for American-made alternatives often, but I have yet to find any that are as effective as the ones I use. So I wouldn’t go for American products yet.”

By BBC