The recent election of Donald Trump as President of the United States has sparked a global fear of the possible dire consequences of his economic policies. Like all manufacturing sectors, the hair and beauty industry could be affected by changes in the presidential team, with the issue of taxes and tariffs at the forefront.
Trump’s first term in office already represented no small shake-up in US trade policy – he was accused of protectionism. His upcoming second term in the White House could prove to be even more radical; in fact, the president-elect has promised a more aggressive tariff policy than the one implemented a few years ago, when he imposed tariffs on about $380 billion (about 350 billion euros at today’s exchange rate) of imported US goods, amounting to about 15% of total US imports from the rest of the world, including as much as $35 billion from China.
According to his recent declarations, Trump is now proposing universal tariffs of 60% on all Chinese imported goods and 10 – 20% on goods from the rest of the world. It is also possible he will introduce 100% duty on imports from countries that are reducing the use of the dollar and as much as 200% on vehicles imported from Mexico.
The optimists boast that they are not worried because they believe that Trump’s statements or threats are rarely followed by real action. Just talking about a change in import duties seems to be enough to spook the market and create deep uncertainty in the world’s major stock exchanges.
What we know right now is that manufacturers and distributors of premium brands who are well positioned in the USA might soon face a dilemma as their products become too expensive once they reach the retail outlets.
The global hair and beauty market remain buoyant both in the retail and the professional sectors.
Radical action by the new U.S. administration may well change the dynamics of the American market and make foreign brands focus more on markets with better import and sales conditions.
Analysts now say that more advantages will go to those non-American companies that have organized their production within USA territory, because the new administration is unlikely to want to jeopardise companies that guarantee jobs for American people.
Another element that must be considered is that Trump’s real enemy in this economic war is undoubtedly China, which will be the target of the highest import tariffs. In this scenario, products from Europe, for example, may become more competitive, even if their shelf price will have to rise.
In a global market where the vast majority of players, from giant multinationals to the best-performing professional hair brands, continue to foresee next year trending positively, we can still remain optimistic about possible changes in the US market but, to be on the safe side, we can also turn our attention to many other promising international markets that could offer enticing opportunities for those to expand into new trading areas.
