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

This request comes in the context of escalating trade disputes affecting luxury and consumer goods sectors.

In March, L'Oréal's CEO mentioned that the company is ready to adjust if tariffs are introduced, referencing its pricing strength and beneficial currency conditions due to the robust US dollar.

He emphasized that while tariffs can be navigated, they should not form a part of a reciprocal trade strategy.

Following this declaration, L'Oréal formed a coalition of fifteen beauty firms to officially urge the European Commission to exclude the beauty sector from its initial list of targeted American imports.

The EU had created a lengthy ninety-nine-page document detailing potential tariff targets, which were initially slated to take effect on April 1. However, the European Commission postponed implementation to April 13 to facilitate additional diplomatic talks with the United States.

The French spirits sector, facing the threat of US tariffs reaching as high as two hundred percent, also supported the call for a delay.

France's cosmetics industry association has expressed opposition to new tariffs, presenting trade statistics that show France imports about five hundred million euros’ worth of American cosmetics each year while exporting nearly two and a half billion euros in personal care items to the US. The wider European cosmetics industry supports around two million jobs across the continent.

Despite L'Oréal producing roughly two-thirds of its products sold in the US domestically, company insiders suggest that its fragrance and scented product divisions remain particularly at risk from tariffs.

A decline in these areas could affect the company's profitability, which is already being squeezed by declining consumer confidence in China.

China continues to be a vital market for the global cosmetics industry.

With an expanding middle class, it has become the second-largest market for beauty products worldwide, trailing only the United States.

L'Oréal has reported a decrease in sales in China for several consecutive quarters: down six point five percent in Q3 2024, three point six percent in Q4, and an overall decline of about four percent for the year.

China constitutes approximately seventeen percent of L'Oréal's total sales.

In contrast, US sales rose by just one point four percent in 2024.

Over the past year, L'Oréal's stock price has fallen by around nineteen percent following several years of growth during the COVID-19 period, which were partly fueled by increased demand for luxury cosmetics.

Despite this recent slump, the stock has gained forty-eight percent over the past five years.

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

The net profit reached six point four one billion euros.

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

The New York-listed company has experienced a roughly fifty-seven percent decline in its stock price over the last five years, including a fifty-two percent drop in just the past year.

L'Oréal's performance has positioned it as a significant investment for various high-profile funds.

One distinguished supporter is Terry Smith, a prominent UK-based investor managing thirty-six billion pounds in assets.

The cosmetics industry's call for exemption, akin to that of the spirits sector, has faced public backlash.

Critics contend that excluding luxury items from the EU's trade retaliation reflects a lack of awareness, especially in light of the current economic tensions sparked by the previous US administration.