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

[ad_1] Osmond Chia Enterprise reporter, BBC Information

<img sizes="(min-width: 1280px) 50vw, (min-width: 1008px) 66vw, 96vw" srcset="https://ichef.bbci.co.uk/news/240/cpsprodpb/2738/live/5be87ae0-6eaf-11f0-bc7d-5bb60edf943a.jpg.webp 240w,https://ichef.bbci.co.uk/news/320/cpsprodpb/2738/live/5be87ae0-6eaf-11f0-bc7d-5bb60edf943a.jpg.webp 320w,https://ichef.bbci.co.uk/news/480/cpsprodpb/2738/live/5be87ae0-6eaf-11f0-bc7d-5bb60edf943a.jpg.webp 480w,https://ichef.bbci.co.uk/news/640/cpsprodpb/2738/live/5be87ae0-6eaf-11f0-bc7d-5bb60edf943a.jpg.webp 640w,https://ichef.bbci.co.uk/news/800/cpsprodpb/2738/live/5be87ae0-6eaf-11f0-bc7d-5bb60edf943a.jpg.webp 800w,https://ichef.bbci.co.uk/news/1024/cpsprodpb/2738/live/5be87ae0-6eaf-11f0-bc7d-5bb60edf943a.jpg.webp 1024w,https://ichef.bbci.co.uk/news/1536/cpsprodpb/2738/live/5be87ae0-6eaf-11f0-bc7d-5bb60edf943a.jpg.webp 1536w" src="https://ichef.bbci.co.uk/news/480/cpsprodpb/2738/live/5be87ae0-6eaf-11f0-bc7d-5bb60edf943a.jpg.webp" loading="eager" alt="Getty Images A model is seen during the prerecording of Miss Gee Collection runway show as a part of Seoul Fashion Week 2022 in Seoul, South Korea. " class="sc-d1200759-0 dvfjxj"/> Getty Photographs Automobiles and smartphones might 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 hovering demand lately.

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

Now "95% of my skincare is made up of Ok-beauty merchandise", she provides.

Ms Mak isn't alone in her desire for South Korean skincare manufacturers. Individuals spent as a lot $1.7bn (£1.3bn) on Ok-beauty merchandise in 2024, in accordance with business estimates. That marks a greater than 50% rise in comparison with the earlier yr.

Ok-beauty merchandise are sometimes extra attractively priced than their Western counterparts - but additionally function substances 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 items traded between Seoul and Washington.

It is lower than the 25% levy that Trump had threatened, however many shoppers should not taking any possibilities.

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

"When the tariff bulletins hit, clients acquired strategic with how they have been going to climate the storm," Santé Model's founder Cheyenne Ware informed the BBC.

"Shoppers are getting ready towards the uncertainty."

One other Ok-beauty retailer, Senti Senti, has been ordering extra merchandise since Trump began his tariff threats, says supervisor Winnie Zhong.

This week, she obtained alerts from suppliers urging retailers to "refill earlier than tariffs".

Each retailers stated costs of Ok-beauty merchandise are more likely to enhance because the levies push up prices throughout the business.

"Anybody telling you costs will keep flat by way of the subsequent two years is naive," says Ms Ware.

Costs are certain to rise, particularly for smaller sellers of magnificence merchandise on platforms like Amazon, who function with slim revenue margins, economist Munseob Lee from the College of California San Diego says.

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

"Informal patrons may be turned off by the upper worth, however followers will not discover a straightforward substitute."

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

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

"It depends upon how a lot the value shoots up, however as of now, I'm prepared to pay extra to buy the identical merchandise," she says.

'No straightforward substitute'

Large Ok-beauty manufacturers are in a significantly 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 clients as they've increased revenue margins, he says.

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

"It is going to take a while to take impact since most items being bought within the short-run have already been commissioned at present costs, however we'll see it play out quickly."

<img sizes="(min-width: 1280px) 50vw, (min-width: 1008px) 66vw, 96vw" srcset="https://ichef.bbci.co.uk/news/240/cpsprodpb/4563/live/da980690-6ea9-11f0-a8f2-eba5f5937655.jpg.webp 240w,https://ichef.bbci.co.uk/news/320/cpsprodpb/4563/live/da980690-6ea9-11f0-a8f2-eba5f5937655.jpg.webp 320w,https://ichef.bbci.co.uk/news/480/cpsprodpb/4563/live/da980690-6ea9-11f0-a8f2-eba5f5937655.jpg.webp 480w,https://ichef.bbci.co.uk/news/640/cpsprodpb/4563/live/da980690-6ea9-11f0-a8f2-eba5f5937655.jpg.webp 640w,https://ichef.bbci.co.uk/news/800/cpsprodpb/4563/live/da980690-6ea9-11f0-a8f2-eba5f5937655.jpg.webp 800w,https://ichef.bbci.co.uk/news/1024/cpsprodpb/4563/live/da980690-6ea9-11f0-a8f2-eba5f5937655.jpg.webp 1024w,https://ichef.bbci.co.uk/news/1536/cpsprodpb/4563/live/da980690-6ea9-11f0-a8f2-eba5f5937655.jpg.webp 1536w" src="https://ichef.bbci.co.uk/news/480/cpsprodpb/4563/live/da980690-6ea9-11f0-a8f2-eba5f5937655.jpg.webp" loading="lazy" alt="Getty Images A customer browses cosmetics at an Etude House store in the Lotte Mall Gimpo Airport, operated by Lotte Asset Development Co, in Seoul, South Korea." class="sc-d1200759-0 dvfjxj"/> Getty Photographs The worldwide attraction of Ok-beauty merchandise has been pushed by the recognition of South Korean tradition

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

Meaning international locations which might be residence to among 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.

However it's but to be seen whether or not or not it will imply US patrons change to American magnificence merchandise.

Ms Mak says she does not see US-made merchandise as engaging alternate options.

"I do seek for American-made alternate options usually, however I've but to seek out any which might be as efficient as those I take advantage of. So I would not go for American merchandise but."