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K-beauty brands say tariffs won't raise their prices. People are panic-buying anyway.

Published: 14 May. 2025, 16:43 Updated: 15 May. 2025, 14:11

CHO YONG-JUN
[email protected]

Korean beauty products booth at the KCON LA 2024 in Los Angeles in 2024 [YONHAP]

[BEHIND THE NUMBERS]

A full month after the Donald Trump administration imposed a 10 percent tariff on all imports to the United States, everything — from cars to cameras to previously dirt-cheap Temu items — seems to be experiencing a price hike. But not Korean cosmetics.

Anua's Heartleaf cleansing foam, which sold more than 70,000 units on Amazon in April, is priced at $13 as of press time, according to Amazon price tracker CamelCamelCamel, retaining the same price from 2024. Similarly, VT Cosmetics' Reedle Shot serum and Medicube's face masks have all maintained steady prices in the last couple of months.

Those brands are looking more and more like outliers as sellers around them adjust to the Trump administration's pressure. Hyundai Motor and LG Electronics have both hinted that they will raise prices in the United States to deal with the new tariffs. Nintendo, Leica and even luxury fashion house Hermès have already done so.

So why are cosmetics brands eating the 10 percent cost?

Interviews with six Korean cosmetics brands revealed a common thread of uncertainty, prudence and, most importantly, fear: fear of losing market competitiveness, and fear of hard-earned consumers turning their backs on the nation's beauty products. But the consensus among veterans in the U.S. beauty space — market watchers, vendors and shoppers alike — indicates that such caution might be overblown, and that Korean cosmetics brands, as they adapt to their newly earned No. 1 position in the U.S. market, may soon be in a position to take the offensive.

A screenshot from Amazon shows Korean cosmetic products in a search query [SCREEN CAPTURE]

The fear of a price hike for sellers
The status of Korean skin care products and cosmetic items in the United States is more than just TikTok hype: Many companies witnessed significant growth from 2020 to 2022, after being praised for both their price competitiveness and quality, which has persisted to this date.

“Sales in the United States really began to grow around 2022,” a spokesperson for AmorePacific, parent company of midrange seller Laneige, told the Korea JoongAng Daily. “We strengthened our relationship with vendors like Sephora, we entered Amazon and other e-commerce platforms and our lip care products gained traction in the country.”

Korea was the No. 1 country from which the United States imported in 2024. Shipments totaled $1.7 billion, surpassing those of traditional cosmetics powerhouse France, from which the nation imported $1.26 billion.

One might assume that such market dominance would come with pricing power, granting firms the freedom to pass the burden of Trump tariffs on to consumers. Still, perhaps because Korean beauty firms have never occupied such high seats overseas, none of their representatives gave the Korea JoongAng Daily concrete answers as to whether they were preparing price hikes. In contrast to their more experienced peers in the auto and technology sectors, many said they were “still looking into” the current trade situation.

“You can’t say the tariff has no impact on the business,” a spokesperson from APR, Medicube's parent company, said on May 8. “But we currently don’t have any plans to increase the prices of our products,” the spokesperson added, emphasizing that the U.S. demand for Korean cosmetics is “still alive and well.”

“When Trump first released his tariff plans, we held a meeting with our accounting firm the following week but were told they couldn't give us a specific guideline,” said VT Cosmetics, best known for its Riddle Shot serum in the United States. “Many brands, including ours, have mostly decided that they are still not at the stage where they can decide to go for a price increase.”

Attendees of KCON LA 2024 check out the K-Beauty Street exhibition at the Los Angeles Convention Center on July 26, 2024. [YONHAP]

Meritz Securities Analyst Park Jong-dae, in his analysis on April 28, wrote that many firms were “operating as if there is no tariff imposed, for the time being.”

Outside experts are largely in agreement about the source of this hesitation: Despite their newfound stability, Korean cosmetics firms consider affordability core to their image and maintain a longstanding fear that any hikes will drive price-conscious U.S. customers away.

“Brands will continue to maintain their price, even if that means they have to cut costs in marketing,” said an industry insider who spoke on condition of anonymity because they were not authorized to discuss their company's finances.

The cost of production accounts for 20 to 40 percent of a Korean beauty product's final price on average, said another source who was granted anonymity because production costs are usually kept behind the bar.

“Demand is growing,” the source said. “They don't want to hinder that growth.”

But for those on the ground in the United States — both the buyers and the sellers — this isn't the first rodeo. And despite what brands publicly insist, some of them are, nevertheless, preparing for the worst.

The cracks are showing

“You'll probably see so many brands raising their prices left and right, and it's not something that's coming out of greed,” Liah Yoo, founder and CEO of KraveBeauty, warned consumers in a TikTok video in early April. KraveBeauty is a U.S.-based cosmetics firm that formulates and produces products in Korea.

Liah Yoo, founder and CEO of KraveBeauty, speaks in a TikTok video in early April [SCREEN CAPTURE]

She's not the only one. CBS reported in April that U.S. consumers have been rushing to panic-buy their favorite Korean products in anticipation of price hikes that could come any day. “They know that it's coming,” one seller told the outlet. Stateside stores are also stocking up on Korean goods, owners told The Independent. And prominent beauty-oriented online communities and media outlets, including InStyle and The Strategist, have been circulating lists of recommended Korean skincare and beauty items to purchase in case prices increase.

Some Korean skincare brands are even moving manufacturing into the United States in preparation for trade war escalation.

Notably, Kolmar Korea, a major original design manufacturer for cosmetics, is expected to complete the construction of its second factory in Pennsylvania in the first half of this year, with an anticipated production capacity of up to 300 million units per year.

While the name Kolmar may not ring a bell to many consumers, the firm supplies Beauty of Joseon, Tirtir, Anua, Manyo and many other well-known brands.

Kolmar Korea initially planned for its U.S. factories to serve U.S.-based firms foremost, but the growing pressure of tariffs may result in the factory also manufacturing products for Korean firms.

“Korean firms are increasingly inquiring if we can manufacture their products in our U.S. factory,” a spokesperson for Kolmar Korea said.

But even if brands can weather the current tariff situation, the potential future is another matter.

U.S. President Donald Trump in April announced “reciprocal” tariffs to be imposed on different countries around the world, including a 25 percent levy on imports from Korea, significantly higher than the 10 percent or 20 percent tariffs imposed on Japan and countries in the European Union, respectively. Those tariffs are currently on a 90-day “pause,” but are now set to take effect on July 9.

Professor of cosmetic manufacturing at Sungshin Women’s University, Kim Joo-deok, believes that a rate hike could change some companies' calculations. “A 10 percent increase is ‘fine,’ but if it’s 20 percent, or 25 percent as was planned, that’s a problem for Korean cosmetics,” Kim said.

“The current rate of tariff didn't affect the consumer sentiment so far, and unless the beauty industry is tariffed like the steel industry and forces firms to raise the price, we don't think it will affect the beauty industry's growth,” said Goodai Global, Beauty of Joseon's parent company.

But VT Cosmetics insists that everything is fine — for now. “We still believe that there is still big potential in the U.S. market,” its spokesperson said. “We don’t think the base tariffs affect us in a major way.”

BY CHO YONG-JUN [[email protected]]