WTF! 💥Tariffs Are Crushing Small Beauty Brands and What Can You Actually Do About It – Megan Young Gamble

What You’ll Learn from This Blog:

• Why the 2025 U.S. tariff hikes are especially brutal for small beauty businesses
• The 5 strategies successful indie brands are using to adapt and survive
• Real-world examples and tips to help you stay resilient through policy chaos
  

Note: This blog reflects tariff updates as of June 17th, 2025. 

Introduction : 

“Tariffs are a death sentence for small businesses,” says Lulu Ge, founder of herbal skincare brand Elix. And she’s not exaggerating.

In 2025, U.S. import tariffs on Chinese goods surged to a staggering 145%, blindsiding many small brands. Even with a partial rollback to 30%, the damage had already been done. For large corporations with cash buffers and legal teams, it was a storm they could weather. But for small, independent beauty brands? It was an earthquake that shook the foundations of their business models overnight.

On June 4, 2025, President Trump announced that tariffs on steel and aluminum imports would double from 25% to 50% (exempting the UK,) but hitting most other trading partners. More critically for the beauty industry, tariffs on Chinese imports jumped to 145%, sending shockwaves across product-based businesses dependent on overseas components. Even after the U.S. government rolled that number back to 30%, the financial fallout was already severe. Orders had already been placed. Shipments were already en route. And for brands with small teams and tighter margins, even a modest 20-30% cost spike could erase profitability. A $2.50 cap for a face serum component now costs $4.84. Multiply that across thousands of units, and you’re looking at thousands in unplanned expenses without any price hike cushion or customer warning. This level of unpredictability makes long-term planning nearly impossible for small operations.

This blog explores how these indie brands are not only surviving but learning to outsmart the system, one creative strategy at a time.

🎙️ Curious how this plays out behind the scenes? Listen to my podcast episode on tariffs and their effect in the beauty industry here ….

1. Negotiate With Suppliers: Your overseas partners don’t want to lose your business. Brands are successfully negotiating for cost-sharing on tariff impacts or delayed charges. One example: tween skincare brand Mochidream got their supplier to absorb extra costs on an urgent shipment caught in the tariff window. Many suppliers are open to splitting costs or offering short-term discounts, but only if you ask. Read more about it here

2. Trim Costs Without Cutting Quality: Founders are doing cost audits and trimming non-essentials like PR retainers, slow-moving SKUs, or expensive packaging variations. Simplifying packaging across multiple products or streamlining your assortment can yield savings without compromising performance. The golden rule: cut smart, not deep. Don’t risk losing customer trust by cutting on quality. Read more about it here

3. Adjust Prices Transparently: If you need to raise prices, be honest about why. Brands like Dame have added a clear “Trump Tariff” surcharge at checkout, helping customers understand it’s a tax, not greed. Others, like Foreo, raised U.S. prices by 20% while publicly explaining the rationale. Consumers appreciate transparency, especially when framed as a shared challenge, not a quiet markup. Read more about it here

4. Diversified Sourcing With a “China+1” Strategy: More brands are scouting secondary manufacturing hubs in Vietnam, India, or Mexico to avoid being fully dependent on one country. Some are even investing in in-house production capabilities to regain control. While this isn’t a quick fix, qualifying backup suppliers now gives you a Plan B before another tariff surge hits. And be sure to leverage any free trade agreements – for instance, if you can do final assembly in Mexico or Canada and meet the USMCA trade rules, your imports might dodge extra duties altogether. Read more about it here.

5. Speak Up and Rally Support: Founders are banding together to petition for tariff relief. Nearly 40 female-led beauty brands sent an open letter to the USTR and Congress requesting small business exemptions. Staying silent won’t help, but visibility can. Keep your customers, retailers, and investors in the loop. Even a candid email or social post can build trust and awareness. Read more about it here

Conclusion

The recent surge in tariffs has presented serious challenges for small and independent beauty brands, threatening already narrow profit margins and disrupting global supply chains. While large corporations may have the resources to weather such storms, smaller brands must rely on resilience, innovation, and strategic adaptation. From renegotiating supplier terms to diversifying sourcing strategies and embracing transparent communication, indie founders are finding creative ways to navigate this uncertain landscape. These approaches not only provide immediate relief but also lay the groundwork for more agile, sustainable businesses in the long run.

As trade policies continue to shift, staying informed and proactive is essential. By adopting the strategies outlined in this blog, small beauty brands can better prepare for future disruptions, and position themselves to grow stronger because of them, not in spite of them.

📩 Are you looking to audit your packaging strategy, diversify your supply chain, or prep for growth in a volatile economy? Reach out to getlevelconsulting.com or DM Megan directly to explore how we can support your next product launch.

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