L'Oréal and other EU brands are turning towards an obscure US customs clause called the ‘first sale’ rule to ease the pressure of US President Donald Trump’s sweeping global tariffs.
The clause allows businesses to apply levies at the point of a product's exit from a factory, as opposed to the more costly rate at the point of entering retail.
But the risks involve more paperwork and admin to track products, as well as only being applicable to goods being shipped to the US, according to a report by Reuters.
Despite the potential legal headaches, businesses across the EU are willing to take a gamble, including L'Oreal CEO Nicolas Hieronimus.
“It is part of the possibilities,” Hieronimus said in an interview with Reuters.
"We will make decisions.”
The EU has been hit with 15% levies on imported goods, with the union of member countries originally being threatened with 30% tariffs before a deal was struck.
This is still a significantly higher cost of exporting goods than before Trump’s administration, and has left a bad taste for some leading beauty industry executives.
Hieronimus called the move “not good news” for the cosmetics sector, speaking on a call with investors about the French beauty giant’s second-quarter financial results.
Other beauty executives, such as LVMH Chairman and CEO Bernard Arnault, welcomed the agreement between the EU and the US.
The boss of the French luxury conglomerate acknowledged criticism of the deal, but said that it was a good agreement in the current context.
It follows a new wave of US global tariffs being announced by Trump, as well as an extension of the implementation deadline until 7 August.
The resulting move, which was announced by the White House hours before the actual deadline of 1 August, has caused chaos across stock markets worldwide.
All countries across the globe are subject to a 10% increase in goods exported to the US.
An additional 92 nations have been hit with higher specific tariffs, with Syria having been hit with the highest percentage increase in the newest update.
Canada’s taxes have also been raised to 35%, and Brazil’s 10% tariffs are at risk of being increased to 50%.
Trump’s so-called ‘Liberation Day’ taxes were revealed in April 2025, unveiling the 10% baseline tariff hikes.
The tariffs have had an unprecedented effect on markets and industries across the globe, which have been shaken by the sweeping tax hikes.
Beauty has not been spared either, with brands such as e.l.f. Beauty, Glow Recipe and The Inkey List scrambling to control the situation by increasing the prices of their beauty goods.
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