In recent years, world trade has undergone significant changes as evidenced by large-scale changes in international trade agreements that affected many businesses including the beauty industry and personal care products.
In particular, after the inauguration of Donald trump in 2017, the United States began to try to negotiate better terms for themselves. For example, the government raised tariffs on imports for major trading partners – China, the European Union, Canada and various Latin American countries, including Mexico.
Last summer, cosmetic products and personal hygiene products were among a wide range of consumer goods, which was imposed prohibitively high tariffs due to disagreements between China and the US, and trade tensions are still not fully resolved. Economists and politicians often agree that in such a situation are rarely winners, but, of course, the current environment provides some opportunities, many of which are unpredictable.
However, over the past two weeks on the world market there are several innovations that represent the biggest development over the last couple of years. So, tariffs on imports will decrease due to an agreement European Union-MERCOSUR (southern common market). It was the result of 20 years of negotiations between the European Union and South American countries – Argentina, Brazil, Paraguay and Uruguay, and has a significant impact on the players involved in the production of fine chemicals used for cosmetics and personal care products.
Although the trade agreement is not specified ready-made cosmetics and personal care products, the fact that it will affect the tariffs for the chemicals will have a significant impact on the industry component industry, especially in trade with Brazil, which is the largest size of the market and a significant player in the chemical industry.
Changes in the world market, caused by this trade agreement may be a prerequisite for the development of local South American markets. So, high tariffs for international representatives of the beauty industry, for example, Lush and Kiehl’s, made the markets of countries such as Brazil, are too complex to remain competitive, displacing these brands from the market and allowing small, independent players have a competitive price advantage and better adapted to users ‘ needs.
A similar situation occurred in Asia, particularly in China where domestic brands of cosmetics and personal care products also benefited from higher tariffs set for international brands that helped to stimulate the growth and development of these brands.
Trade wars do accompanied by a warning for the global economy as a whole, which can affect everything that was emphasized in the comments made by the Bank of England this week, which warned that further trade pressure can “crash” in the global economy.