President Donald Trump’s evolving tariff policy has rocked many business owners since he took office in January. On August 7, new tariff rates will go into effect for a number of trade partners, including a 50% tariff on goods from Brazil and a 15% tariff on European Union imports.
But the uncertainty caused by changing tariff policies throughout the second Trump administration has already had a domino effect on brands like Sweet Chemistry, the skin-care brand founded by cosmetic chemist and L’Oréal veteran Alec Batis in 2024. As he negotiates new prices and changing timelines with packaging suppliers in Italy and contract manufacturers in California, Batis said many of his products have remained out of stock for months. And that’s left him struggling to keep investors, retail partners and consumers satisfied.
“I’m just trying to keep in the game at this point,” said Batis. “I’m spending half my day just figuring out where this increase in cost of goods is coming from.”
Batis has already had to adjust prices on his skin-care products to absorb some of those costs. He hopes that with the new tariff rates set for August, his costs will be more predictable, even while Trump’s policies have yet to stick to clear guidelines.
“It doesn’t seem like there’s a rule that there are rules,” he said. “I’m grateful that at least there’s a number now and that I can actually at least take some action. At the same time, I’m going to have to figure out how I’m going to do the extra 15%. And then across the board, my production costs, my cost of goods, almost doubled.”
While many tariffs will not go into effect until August 7, as of Friday, Canadian exports are now subject to a 35% tariff. The U.S. and Canada failed to reach a trade agreement prior to the August 1 deadline, but Prime Minister Mark Carney said he hopes to still work with the U.S. to reach a deal. The situation has left Vancouver-based private label manufacturer Blanka still determining the best course forward, as 80% of its clients are U.S.-based companies.
“We’re really sensitive to the changes in duty, freight cost and fulfillment complexities, because we are such a hands-on supply-chain company. So it’s making us rethink our operations,” said Blanka co-founder and CEO Kaylee Lieffers.
Lieffers said the company is in the process of researching a U.S.-based manufacturing facility to offset some of the costs associated with tariffs. But eventually, she believes she’ll have to raise her prices to meet those costs.
“When there’s so much uncertainty, the companies end up absorbing a lot of the costs,” she said. “We have not yet adjusted prices, but that’s going to look like something that we’re going to have to do even with this uncertainty, because we can’t continue to absorb.”
Other founders agreed the unpredictability comes with a cost beyond simple finances. Matthew Berkson, co-founder and CEO of fragrance brand Maison Louis Marie, said his brand is still in a “wait and adapt” mode.
“The regions you thought were safer can quickly become more exposed, which makes planning especially challenging right now,” said Berkson, whose brand sources materials and packaging from the likes of China, the E.U. and Mexico. “We have not yet made any price adjustments, but the unpredictability is definitely starting to weigh more heavily on us.”
Vicken Arslanian, CEO and founder of niche perfume distributor Europerfumes, said a 10% tariff is manageable as the cost can be absorbed between the brand, distributor and consumer. But goods from the E.U., where many of Europerfumes’ brands, like Xerjoff and Matiere Premiere, are based, will now be subject to a 15% tariff, per Trump’s new policy.
“Anything above 10% becomes detrimental to our business,” he said. “If tariffs are indeed good for the country, which I don’t think they are, I’m ready to ‘take one for the team.’ However, uncertainty and a constantly moving goalpost is terrible for morale and for business.”
David Chung, founder of New Jersey-based cosmetics manufacturer iLabs belives the tariffs will impact more than just beauty, but also the economy as a whole.
“While existing trade barriers have already presented challenges in sourcing and production, the expansion of tariffs to additional markets threatens to further disrupt supply chains, increase operational costs and strain business margins,” he said. “These added costs are likely to be passed on to consumers, driving up prices and contributing to inflation.”
For Batis, founding Sweet Chemistry was a way to control his own destiny rather than be an employee. But he feels small start-ups like his own brand that lack the volume and purchasing power to negotiate better deals with manufacturers are the ones being squeezed by the volatility caused by tariffs. And he remains uncertain if the new August tariff rates will hold or change once again.
“Our country is built on the opportunity to build your own thing, but the rules changing all the time are really making that challenging,” said Batis.
