Everyone is talking about trade war, we see trade war here and there, it seems everywhere. You're still in the middle of confusion around what trade war is and why we bring it on air today? Zoom into this article as we're revealing the ongoing situation with U.S. - China trade dispute and the link to cosmetic business.

U.S. - China Trade War

What is a trade war? A trade war is an economic battle happening when one country raises import tariffs and foreign countries make an attack in return with similar forms of trade protectionism. It is obvious that trade war mostly leaves a huge impact on the economic aspects of the countries involved, however, in some cases, the effect of the fight is also spreading to politics and diplomacy.

March 2018 marked the beginning of U.S. - China trade war. The dispute is heating up and the fight has been going on for a long time. For more details, the Trump Administration has levied a 25% tariff on Chinese products and China, in its return, has imposed tax on U.S. agricultural products. Tensions between the two economies continue to escalate with no signs of cooling off.

A Hit To U.S. Cosmetic Business in China?

U.S. Cosmetic Business is facing to the risk of losing its biggest market when China has hit back by imposing additional tariffs on 5027 products from the United States. Beauty items and beauty-related items are among the products that faced the highest tax penalty; particularly, lipsticks, perfumes and nail polishes are supposed to be levied an additional 25% tariff. Beauty ingredients like coconut oil or cocoa butter, as a result, are not out of this war. Beauty-related items, such as hair brushes, face powders or salicylic acid aren't 'less competitive' in the list, coming the second-highest with 20% tariff. Other commonly used cosmetic ingredients will also be taxed an additional 10% tariff as well.

At this moment of trade war, domestic beauty brands in China have benefited much more from high tariffs imposed on American brands. On the other hand, American brands confront the risk of losing market share as Chinese consumers are now shifting away to domestic products and those from other regions like South Korea, Japan or Europe. Many women confessed that they would consider other products and give up on American beauty brands in the near future if the prices have been increased by more than 10 percents, as Global Times stated.

It's still too early to assume that trade dispute sets off an economic boom on American cosmetic business in China as in fact, there are many American cosmetic brands that are manufactured and sold in China, meaning they can be safe under tax punishment. Compared to agricultural goods, skincare and cosmetic products are less affected. But it doesn't meant the threat is unreal, and no matter whoever wins in this tough game, trade war will end up hurting both China and U.S. sides and leave a warning for the global economy.