Cosmetics Exports: US Tariffs, How to Protect Your Margins and Diversify Your Markets

It is one of the most telling figures in the French beauty economy: in 2025, cosmetics exports fell by 0.1% to €22.4 billion, according to data from the French beauty industry federation (FEBEA) reported by the business press. It is the first contraction in at least twenty years, excluding the pandemic period, for a sector used to adding an average of €1.5 billion in foreign sales every year. The main cause is well known: higher US tariffs, which tipped the largest market outside Europe from growth into decline. For any brand that exports, or plans to, cosmetics exports are no longer just a growth lever: they are a matter of risk management, pricing and diversification.

In short: US tariffs cut French cosmetics exports to the United States by around 19% in 2025, which halted the sector’s overall growth. The brands that are holding up best are those that diversify their markets, protect their margins through rigorous pricing and cost policies, and do not depend on a single country or a single distributor. Small businesses heavily exposed to the US market are the most vulnerable.

A key driver of foreign trade that is changing pace

Cosmetics remain one of the pillars of French foreign trade: according to FEBEA, the sector is the second-largest contributor to the country’s trade balance, behind aerospace and ahead of wines and spirits, with a surplus of close to €17 billion in 2025. Fragrances account for around €8 billion of exports and make-up for more than €11 billion, according to the same sources. This weight explains why even a slight slowdown is closely watched by the public authorities: in October 2025, the French Treasury (Direction générale du Trésor) devoted a economic flash report to French cosmetics exports facing US tariffs (in French).

This change of pace is all the more noticeable because the sector had grown used to steady growth: exports passed the €20 billion mark in 2024, driven in particular by fragrance. The 2025 dip is therefore less a crisis than a signal: tomorrow’s growth will no longer come automatically from the US market, and every company needs to ask what share of its revenue depends on a single country.

The US shock: tariffs and supply chain costs

The United States is the largest market for French cosmetics outside Europe: nearly €3 billion of products were exported there in 2024, around half of them fragrances, according to FEBEA. Tariffs on cosmetics, which were zero until 2024, rose to 15% in summer 2025, with additional surcharges on certain metal packaging components, according to the federation. Exports to the United States fell by around 19% in 2025, and FEBEA estimates the cumulative loss at around €800 million, taking into account a projection for the first half of 2026. The exact level of applicable duties has since changed under the trade agreement between the European Union and the United States, which the federation would like to see return to 0%: the rate in force should therefore be checked before any price calculation.

For a brand, the effect of a tariff is not limited to the “tax” line: it affects the margin, the selling price to the distributor, competitiveness against local brands and cash flow, since imported stock ties up capital. The least diversified SMEs, heavily dependent on the US market, are the most exposed, particularly in fragrance, skincare and make-up. Large groups, with factories and markets on several continents, have more room to reorganise their production.

Trade geopolitics also remain fluid: at the end of September 2026, the United States and China published reciprocal lists of products worth around $30 billion each that will benefit from tariff reductions, including US cosmetics entering China, according to the trade press. These shifts are a reminder that an export strategy must be built on scenarios, not on a single assumption.

How brands are adapting: prices, costs and diversification

In this context, several responses are emerging among exporting companies. The first is to adjust pricing: passing all or part of the tariff on to the distributor, absorbing part of it in the margin, or reviewing the range and formats offered. The choice depends on the brand’s positioning: a luxury brand, for which price is part of its image, has different room for manoeuvre from an affordable brand that is more price-sensitive.

The second response is to rebalance the market portfolio. The Middle East accounts for around 5 to 6% of French cosmetics exports, according to the press, and other regions are growing without yet offsetting the US decline. For a mid-sized brand, diversifying often means choosing two or three priority markets and working them in depth rather than multiplying countries. Before committing, it is worth reviewing these points:

• Geographic dependence: what share of revenue comes from a single country or a single distributor?
• The full landed cost: tariffs, transport, insurance, taxes, distributor margin.
• Lead times and stock: how many months of stock are tied up abroad, and with what risk of tariff changes?
• The target market’s prerequisites: documents, local responsible party, registrations, adapted labelling.

This analysis is not reserved for large groups. A brand with a few million euros in revenue can easily keep a simple dashboard, updated every quarter, that cross-references its sales by country, its margins after tariffs and its stock levels abroad. It is this tool, more than any forecast, that makes it possible to react quickly when a rate changes or a distributor revises its orders, and to secure discussions with a bank or an investor.

Launching a cosmetics range without a cosmetics background?

For a fashion, home décor or lifestyle brand launching a beauty range, export is often a natural goal, as the brand already enjoys international awareness. But the economics must be worked out before the launch, not after: the margin on a cosmetic product differs from that on a garment, its stock is more sensitive to dates and storage conditions, and each market imposes its own rules. A project that targets the United States from day one without assessing the impact of a 10 to 15% tariff on the selling price risks getting off to a poor start.

The right approach is to build a business model for each market, with a target selling price, a detailed full cost and a realistic timetable. It also makes it possible to choose, between licence, partnership or own brand, the model best suited to the brand’s investment capacity and appetite for risk.

Clear’s perspective

Clear, an EU / UK / US cosmetic regulatory compliance firm, supports brands that export or are preparing to do so. One observation comes up often: companies prepare their prices and logistics carefully, but underestimate how to organise their presence on the ground, in particular appointing a local responsible party and preparing the product documents required by each market (a Responsible Person in the United Kingdom and the European Union, an agent and registrations in the United States). Anticipating these points avoids delays at launch, which are all the more costly when the stock is already tied up. To understand the general framework, visit our cosmetic regulations page.

To find out more about the marketing and business challenges of the sector, our cosmetics industry page details our areas of expertise. And if your export project requires skills you would rather not hire for, discover our regulatory resource delegation offer, which lets you strengthen a team flexibly.

Frequently asked questions

Why did French cosmetics exports fall in 2025?

According to FEBEA, the decline is mainly due to US tariffs, which cut sales to the United States by around 19%. Other markets are growing but do not yet offset this drop. The result is near-stagnation of total exports at €22.4 billion.

How can an SME limit the impact of tariffs on its margin?

It can combine an adjustment of the selling price, a renegotiation of production and transport costs, and diversification into other markets. The key is to calculate the full landed cost for each country before setting the price. A financial or customs adviser can help build these scenarios.

Should a brand target several export markets from launch?

It is generally better to start with one or two well-chosen markets, then expand once the first results are solid. Multiplying countries too early spreads resources thin and complicates logistics. The priority is to avoid dependence on a single market or a single distributor.

Preparing a launch or an export expansion? Contact Clear to secure your presence in Europe, the United Kingdom and the United States.