Unpacking the Tariff Wars (As of March 5, 2025)

What beauty and apparel brands can do and how 3PLs can help in the face of double-digit duties coming from all angles.

It’s early March, 2025, and we’re beginning to get some clarity as to what the global tariff situation is going to look like. Here’s who’s done what: 

1. The United States has implemented 25% tariffs on (almost) all imports from Canada and Mexico and a 20% tariff on all goods imported from China, marking a pivotal shift in international trade dynamics. 
2. China has announced a 15% tariff on U.S. chicken, wheat, corn and cotton as well as 10% tariff on U.S. sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products
3. Canada has announced an immediate tariff of 25% on roughly $20 billion worth of U.S. goods. An additional 25% tariff on an additional $86 billion worth of U.S. goods is queued up for March 25. The bulk of these tariffs are aimed at food and beverage and consumer goods – including apparel and cosmetics.
4. Mexico currently has plans for "retaliatory tariffs.” We should know more when Mexican president Claudia Sheinbaum addresses her nation this coming Sunday (March 9, 2025).

Obviously the ripple effects will be felt throughout the global economy, but let’s drill down into two verticals we know well: beauty and apparel. 

How the Tariff War Will Likely Impact the Beauty Industry

From cosmetics to skincare, over 25,000 products in the U.S. beauty market are primarily sourced from China. That’s how heavily brands rely on Chinese manufacturing. Chinese imports have been subject to a 10% tariff since 2017, but now, an additional 10% is going to bring that total to 20%. 

For beauty brands reliant upon Chinese manufacturing, the options are stark but straight forward: 

1. Absorb the new tariffs and accept smaller margins…
2. Pass costs on to consumers and risk market share… 
3. Or explore new manufacturing and/or supply chain solutions knowing that shifts like that can impact product availability, delivery times and perhaps even brand loyalty.

There’s no universal right answer. All brands and all supply chains are different. Price points and consumer markets are different. As a 3PL that’s been in this business for over 25 years, we know that every brand needs to self-evaluate, talk to their supply chain partners and identify scenarios and solutions that work best for them. 

Impact on the Apparel Industry

Apparel is in a similar boat. The tariffs will create substantial disruptions. Canada and Mexico have been pivotal suppliers of textiles (raw materials) and apparel to the U.S. Geographic proximity and the USMCA made things simple. A 25% tariff undermines these advantages and will result in increased costs for U.S. brands and retailers sourcing from these countries – and the consumer will most likely pay the price. 

We know from historical experience that, in response to tariffs like these, brands will look to alternative sourcing options from countries not subject to these tariffs, such as Vietnam, Bangladesh, and India. But again, modifying supply chains is a complex and time-consuming process that can disrupt supply and increase operational costs. The consumer will get stuck with the cost of such changes, particularly in the short-to-medium term. 

But First, A Quick Review of the Tariff Timeline Through the Beauty and Apparel Lens

• Jan 27 – Trump signals tariffs on pharmaceuticals and tech (potential supply chain disruptions).
• Feb 4 – 10% tariffs on all Chinese imports take effect (major impact on beauty & apparel).
• Feb 10 – China retaliates with tariffs on $13.9B of U.S. exports (including chemicals used in cosmetics).
• Feb 10 – 25% steel and aluminum tariffs announced (increasing costs for packaging materials).
• Feb 14 – Auto tariffs announced (affecting logistics and supply chain costs).
• Feb 18 – Trump confirms tariffs on semiconductors and pharmaceuticals (disrupting production of skincare, supplements).
• Feb 26 – Announces 25% tariffs on the European Union (potentially impacting luxury beauty & fashion imports).
• Mar 4 – China raises tariffs to 20% on U.S. goods (potential retaliation on beauty, wellness products).
• Mar 4 – China places 15 U.S. companies on its export control list (limiting access to beauty and wellness ingredients).
• Mar 4 – China halts U.S. lumber imports (affecting packaging materials like sustainable wood-based components).
• Mar 4 – China launches anti-dumping probe into U.S. fiber optics (affecting tech-driven wellness products).
• Apr 2 – Auto tariffs set to begin (increasing transportation and logistics costs for beauty and fashion brands).

What About Fulfillment?

Fulfillment in both industries are expected to encounter significant challenges. The increased tariffs will raise the cost of goods sold. Retailers will adjust pricing strategies, renegotiate supplier contracts, or seek new suppliers altogether. These adjustments can lead to delays in product availability and increased operational complexities.

But perhaps the biggest wrench thrown into the fulfillment system that baked into these tariffs is…

The Potential Suspension of De Minimis

Ecommerce brands have come to love de minimis, the stipulation that shipments valued at under $800 coming into the U.S., direct to consumer, from Mexico do so duty free and without formal customs entry. One day it’s on the chopping block, the next day it’s not. This is something that we are watching closely.

If De Minimis is Suspended, How Brands Can Respond?

There are few tools in the toolkit. 

If de minimis were to be suspended, brands can shift their fulfillment operation to the U.S. to facilitate domestic shipping, thereby avoiding the 25% Mexico-to-U.S. tariff. Brands need to keep in mind, though, that doing so might subject them to the 20% China-to-U.S. tariff. 

Brands can also fine-tune their supply chain and inventory management through bulk shipping or advanced inventory management systems. In the latter case, that means stringent monitoring of stock levels, demand forecasting and all but eliminating overstocking and stockouts. Not always the easiest things to do. 

And of course, there’s pricing. Every brand should be running financial models that forecast how price changes (let’s be real: increases) in response to the tariffs would impact profitability and competitiveness. 

Bonus Tip: If you’re going to increase consumer prices, bring your marketing and communications teams into the conversation. How you position and talk about these changes to your customers – especially the loyal and influential ones – can have a significant impact on the outcomes. 

How Can 3PLs Help Their Brands Navigate the Tariff Wars?

A lot of it comes down to strategy, knowledge, experience and support. 

Your 3PL can be a great resource for evaluating alternative sourcing options. They most likely have worked with brands that utilize suppliers unaffected by the tariffs (i.e., Vietnam, India, Bangladesh and various Latin American countries). And if they have warehouses in multiple regions throughout the U.S., they can help with strategic inventory management and allocation to reduce costs and shorten ship times.

Experienced 3PLs often have deep knowledge of trade regulations, duty classifications and compliance. Plus, they’re paying serious attention to the tariff wars. 

3PLs with the right technology can also make a huge difference when it comes to navigating tariffs. They can provide their brands with real-time visibility into stock levels and demand patterns that can quickly inform purchasing and pricing strategies. 

The Best Defense? 

Stay vigilant. Stay up to speed. Designate a tariff czar or strike team solely focused on keeping tabs on the situation that reports daily to management. (And we do mean daily.) 

But most of all, stay grounded. Keep thinking long term while making short and medium term decisions that keep operations running as smoothly as possible.