L'Oréal, the French cosmetics leader valued at around one hundred eighty-eight billion euros, has officially urged the European Union to exempt the beauty industry from its proposed retaliatory tariffs on the United States.

This request arises amid escalating trade conflicts involving the luxury and consumer goods markets.

In March, L'Oréal’s CEO mentioned that the company is ready to adjust if tariffs are enacted, pointing to its pricing power and advantageous currency conditions thanks to the strong US dollar.

He remarked that although tariffs can be handled, they should not be included in a reciprocal trade strategy.

Following this declaration, L'Oréal formed a coalition of fifteen beauty firms to formally request the European Commission to exclude the beauty sector from its list of American imports targeted for tariffs.

The EU had created a ninety-nine-page document detailing potential tariff targets, originally scheduled to be implemented on April 1. However, the European Commission postponed this deadline to April 13 to facilitate additional diplomatic discussions with the United States.

Simultaneously, the French spirits industry, facing the prospect of US tariffs reaching up to two hundred percent, also supported the delay.

France’s cosmetics trade association has opposed new tariffs, referencing trade statistics that show France imports approximately five hundred million euros of American cosmetics each year, while exporting around two and a half billion euros in personal care products to the US. The wider European cosmetics industry supports roughly two million jobs across the continent.

While L'Oréal produces about two-thirds of its products sold in the US domestically, insiders indicate that its fragrance and scented product divisions are particularly susceptible to tariffs.

A downturn in these areas could adversely affect the company's profits, which are already strained by declining consumer confidence in China.

China remains a vital market for the global cosmetics sector.

With a burgeoning middle class, it has become the second-largest beauty product market in the world, following the United States.

L'Oréal has reported dropping sales in China over several quarters: a decline of six point five percent in Q3 2024, three point six percent in Q4, and an overall drop of around four percent for the full year.

China represents about seventeen percent of the company's total revenues.

In contrast, US sales experienced modest growth of only one point four percent in 2024.

Over the past year, L'Oréal's stock price has fallen by about nineteen percent after several years of increases driven by heightened demand for premium cosmetics during the COVID-19 pandemic.

Despite this recent decline, the stock has appreciated by forty-eight percent over the past five years.

In 2024, L'Oréal achieved annual revenues of forty-three point four eight billion euros, marking a year-over-year increase of five point six percent.

Net profits totaled six point four one billion euros.

In comparison, its American competitor Estée Lauder is valued at around twenty-four billion US dollars.

The New York-listed company has seen its share price drop by roughly fifty-seven percent over the last five years, including a fifty-two percent decrease in the past year alone.

L'Oréal’s strong performance has made it a prominent asset for various prestigious investment funds.

One notable investor backing the company is Terry Smith, a well-known UK investor whose fund oversees thirty-six billion pounds in assets.

The cosmetics industry's plea for exemption, similar to that of the spirits industry, has faced public backlash.

Critics contend that excluding luxury products from the EU’s trade measures represents a disjointed approach, particularly given the ongoing economic tensions that originated with the previous US administration.