The 50% Lipstick Tax: Canada's Beauty Brands Are Caught in the Trade War

The $10 lipstick is caught in the trade war. Since August 22, Canadian-made cosmetics entering the US have faced a 50% tariff, and since September 8, US-made perfume, makeup and hair products coming into Canada have faced a matching 50% counter-tariff, according to law firm Blakes and the federal counter-tariff list. Perfumes, lip and eye makeup, nail products and hair preparations are all on it.

"When the United States asked too much and offered too little, we chose to stand up for Canadians," Finance Minister François-Philippe Champagne said when Ottawa announced the countermeasures on C$27.6 billion of US goods, along with a $7.5 billion support package, in an August 25 release. Beauty is one of the industries where both sides of that fight land on the same shelf.

How Do Beauty Tariffs Hit Canadian Brands?

From both directions at once. Canada sells more than $1 billion a year in cosmetics into the US, second only to South Korea, and buys about $4.2 billion a year of American cosmetics, which is more than a quarter of the US industry's exports, BeautyMatter reported. Many brands make products on one side of the border, ship ingredients or packaging across it, and sell on the other.

This round is also different in kind. The US used Section 338 of its 1930 trade law for the first time by a president, and goods that comply with the Canada-US-Mexico trade agreement were not protected, Personal Care Insights reported. Darren Praznik, head of Cosmetics Alliance Canada, said the move showed the US "can no longer be trusted to keep any agreement." He also warned that tariffs at this level "will disrupt manufacturing systems, supply chains, distribution channels all across North America," per BeautyMatter.

Which Canadian Beauty Brands Are Most Exposed?

The small ones. Cheekbone Beauty, an Indigenous-owned brand in St. Catharines, Ontario, has four staff and sends about 20% of its sales to the US, The Canadian Press reported in July. "When you felt like you had your footing, of course, something else would happen," founder Jenn Harper said. The brand's Katelynn Miron was more direct with BeautyMatter. "We are not able to absorb that cost."

Dan Kelly of the Canadian Federation of Independent Business told The Canadian Press a 50% tariff could leave some small businesses "essentially" defunct. Indie beauty brands typically have thin margins and no warehouse on the other side of the border, so they cannot reroute, absorb or wait.

The giants are exposed too, just with deeper pockets. The Ordinary, built in Toronto by DECIEM and now owned by Estée Lauder, is among the products made in Ontario, and L'Oréal runs a factory in Quebec, according to BeautyMatter. Estée Lauder booked a US$102 million gross tariff hit in its fiscal 2026 results.

Will Makeup Prices Go Up in Canada?

Some already are, and more probably will. With a 50% duty on US-made beauty products, "you're no longer looking at a $10 impulse purchase," influencer Bryce Gruber told Briefs. The US Personal Care Products Council notes that "Canada is the largest export market for the U.S. cosmetics and personal care products industry," according to Premium Beauty News, so a lot of what is on Canadian shelves is affected.

The official numbers have not caught up yet. Statistics Canada's September consumer price index showed health and personal care prices up just 1.7% year over year, below overall inflation of 3.1%, according to the CPI table. That category is broad and the counter-tariffs only took effect in September, so watch the next few months. Shoppers are still spending. Sales at health and personal care stores rose 1.6% in August, their tenth straight monthly gain, Statistics Canada reported.

What Can Canadian Beauty Shoppers and Founders Do?

Shoppers have a new reason to read labels. A Canadian-made brand on a Canadian shelf avoids the counter-tariff, and buying it directly supports the companies taking the hardest hit on the US side. Canada's beauty manufacturing base is bigger than most people assume, from indie founders to the contract labs that make products for global brands.

Founders have fewer good options, but some exist. Ottawa's counter-tariffs allow businesses to apply for remission when they cannot source an input outside the US, Blakes notes, and the $7.5 billion support package is aimed at affected companies.

Polls suggest Canadians are willing to absorb some pain. About 76% backed Prime Minister Mark Carney's decision to suspend trade talks in August, Premium Beauty News reported. That support will be tested at the checkout, one lipstick at a time. For a small brand like Cheekbone, the question is not whether Canada wins the trade war. It is whether they are still in business when it ends.