2024 US Presidential Election: Implications For Beauty Industry

The impact of the US presidential election on the beauty industry could be most acutely felt in the area of trade policy, though it also could move the needle, one way or the other, on existing and future regulatory pressures, experts agreed at the Independent Beauty Association’s Cosmetics Convergence Fall 2024 Symposium.

“There are a lot of factors at play and topics that could be thrown into some chaos and really defined by the administration that’s leading the country as well as the downstream elections and state legislators,” according to Annika von Grey, senior consultant with DC-based policy and global intelligence firm FiscalNote, which the Independent Beauty Association now counts as a partner.

Von Grey, part of FiscalNote’s Professional Services team with a focus on US federal, state and local policy, discussed the election with IBA’s VP of global supply chain and sustainability resources, Akemi Ooka, in a 12 September session of the IBA’s inaugural Convergence event.

“I really focus on the way that trade is going to be impacted,” von Grey said. “Trade is a constant topic in policy spaces and is very dramatically influenced by geopolitical happenings. This is true at the federal level of course but also reflective of decisions of some state policymakers.”

Former President Donald Trump had an “America first” approach to international trade during his 2016-2020 term that was defined by unilateral action and aggressive negotiation tactics as well as tariffs. His administration imposed several rounds of tariffs on steel, aluminum, washing machines solar panels and other goods from China, affecting more than $380bn worth of trade at the time of implementation, according to the Tax Foundation. The cosmetics industry did not go unaffected. (Also see "Industry Braces For Holiday Tariff Impacts As US-China Trade War Continues" - HBW Insight, 12 Sep, 2019.)

Meanwhile, US Vice President and Democratic Party presidential candidate Kamala Harris has championed a multilateral approach to work with allies and participate in international agreements to address global trade. She has also argued the US should “de-risk,” not decouple, from China and claims the US lost the trade war that began under Trump. Notably, however, the Biden administration has maintained most of Trump’s tariffs. (Also see "AHPA Asks US To Lift Tariffs On Imports From China Weighing Down Supplement Firms" - HBW Insight, 2 Jun, 2021.)

Ooka said the beauty industry still relies “heavily” on Chinese components and materials. “I don’t know if tariffs are playing out any further in the industry vs when they were initially imposed – I think the primary impact may have been to plastics (i.e., packaging), but there are probably also considerations for other materials like zinc (for sunscreens, etc.),” she said in an exchange with HBW Insight on 19 September.

However, there is “some wariness about supply security” if tensions with China escalate, Ooka said. She cited reports that Trump has proposed up to 100% tariffs on Chinese goods and a blanket 10%-20% tariff on all other imports.

“Harris seems more intent on preserving the status quo,” she said. “Overall, it seems like both administrations would be tough on China; however, I’m not sure what the impact (or retaliation) might be if there is a more aggressive stance taken.”

Ooka said there is “general unease” about China’s aggression toward Taiwan. “This continues to be a concern for packaging suppliers. I do think a Democratic administration would more aggressively defend Taiwan, though most hope that tensions don’t rise further.”

In a recent speech at the New York Economic Club, Trump said that, if re-elected, he would press federal agencies to eliminate 10 regulations for every new one added.

Ooka said ingredient supply challenges related to China lockdowns during the COVID-19 pandemic have been largely resolved at this stage and companies are better fortified against future problems. (Also see "Independent Beauty Association Maintains Watch On Global Supply Chain In 2022" - HBW Insight, 8 Feb, 2022.)

“Bottlenecks coming out of the COVID/China supply outages resulted in much more activity around supply chain redundancy and diversification,” she said. Ooka cited SupplyChainBrain in noting that Mexico surpassed China as the biggest exporter to the US last year. “US companies have focused on [Latin America] to bolster operations for reliable and cost-efficient supply,” she said.

Ingredient shortages today “are generally driven by manufacturing constraints or lower yields (climate change vs. supply-related disruptions due to COVID or China policy,” Ooka said, adding that cost pressure has been a factor for many companies due to high inflation. 

More Or Less Regs?

On the regulatory front, a Harris Administration would likely prioritize stricter regulations on safety and environmental standards while Trump is likely to take a deregulation approach again.

Von Grey noted, “Democratic-leaning states especially tend to be stricter with regulations and provide a lot of oversight, so even at the legislative level I think we can anticipate a little bit of a turning in either direction of more stringency or less depending on the political leanings and partisan leadings of each state and of the administration.”

Early in his 2016-2020 term, Trump signed executive orders intended to reduce regulatory burdens on industry and costs associated with compliance. The orders, taken together, directed each federal agency to establish a Regulatory Reform Task Force to evaluate existing regulations and identify at least two that could be eliminated for each new regulation issued. (Also see "NPA Submits Wish List For Reducing FDA Regulatory Burdens Per Trump Order" - HBW Insight, 12 Dec, 2017.)

The Trump administration reported later that the effort generated $23bn in regulatory cost savings in fiscal 2018, more than double the savings over the previous year. However, the Government Accountability Office released a report in 2021 saying that estimate may have been "overstated."

In a recent speech at the New York Economic Club, Trump said that if he were re-elected, he would go even farther, eliminating 10 regulations for every new one added.

Von Grey also addressed environmental regulations. “Environmental topics have been quite politicized. So when it comes to things like chemicals, chemical contamination in water, but also sustainability claims, corporate reporting requirements, etcetera, I think all of that will be thrown into the mix of conversation and, depending on who is in charge, essentially that is really going to be the debate.”

Von Grey noted there is a particular focus at the state level on bills targeting packaging, including in the cosmetics and personal-care sectors, as well as chemicals in products, corporate ESG, and supply chain. Of 1,477 total bills introduced in state legislatures that mentioned consumer and personal care products, 283 passed in 2024. A total of 206 bills mentioned plastic bans, extended producer responsibility (EPR), or packaging, and 37 of those became effective. (Also see "Post-MoCRA, US Cosmetics Legislative And Regulatory Footprint Goes On Expanding" - HBW Insight, 18 Sep, 2024.)

Corporate ESG was discussed in 60 introduced bills at the state level, though very few of those passed.

With regard to sustainability overall, Ooka expects businesses in the beauty sphere will be less affected in the immediate term by a Democrat or Republican administration than others, “as [cosmetics] companies seem to be making choices about sustainability/GHG footprint/circularity based on factors other than the administration’s policy (e.g. compliance with EU regs, stated company mission/values).”

However, stakeholders should be aware that a Republican administration could pull back from pacts like the UN Paris Agreement, and Project 2025 – published by the conservative think tank Heritage Foundation in 2022, but frequently linked to Trump in the media – “has quite drastic proposals like dissolution of the NOAA [National Oceanic and Atmospheric Administration] and downsizing the EPA,” Ooka added.

A Democratic administration “would potentially be more inclined to favor climate change mitigation policies, but they may be hampered by the recent Supreme Court’s Chevron deference ruling,” she said, referring to the 28 June decision in which the land’s highest court overruled the decades-long doctrine of judicial deference to “permissible” agency interpretations of ambiguous statutory language. (Also see "Deference No More: More Challenges Against US FDA After Supreme Court Tosses Chevron Doctrine?" - HBW Insight, 1 Jul, 2024.)

Overall, “It is probably still the case that states will drive more legislative and regulatory activity than the federal government in 2025 in this area,” Ooka said.