The mutual tariff negotiations between Korea and the United States have been postponed again, continuing the tension in the domestic food and cosmetics industry, which has rapidly increased exports to the U.S. They are closely monitoring the government's negotiation process and preparing countermeasures, but if tariffs are imposed as scheduled, a blow is inevitable.
On the 7th (local time), President Trump revealed in a letter published on social media platform Truth Social that "starting August 1, 2025, we will impose a mere 25% tariff on all Korean products sent to the U.S., and this tariff will be separate from the tariffs on individual items."
Following the 90-day postponement of the reciprocal tariff on April 9, President Trump has been conducting trade negotiations with Korea while only applying a basic tariff of 10%. Senior officials from our government have been traveling back and forth to Washington, D.C., but ultimately failed to derive a significant conclusion within the first postponement period. Earlier, the U.S. government had reached agreements with the United Kingdom, China, and Vietnam to reduce reciprocal tariffs.
Recently, the food industry, which has been showing strong exports to the U.S., cannot hide its tension. According to the Ministry of Agriculture, Food and Rural Affairs, the export value of K Food Plus, including fresh and processed foods as well as pesticides and seeds, was $6.67 billion (approximately 9 trillion won) in the first half of this year, marking a 7.1% increase compared to the same period last year, and reaching a record high. In particular, exports to North America rose by 24.3% compared to the same period last year, amounting to $1.03 billion, showing the highest growth rate.
In particular, the industry believes that if reciprocal tariffs are imposed starting next month, Samyang Foods, which produces 'Buldak Bokkeum Myun,' will be hit hard. Samyang Foods had 1.728 trillion won in sales last year, with 77% (1.3359 trillion won) coming from overseas, and 28% of total exports occurring in the U.S. As it produces all its products domestically, it bears the full impact of the tariffs.
Earlier, on April 4, Kim Dong-chan, the CEO of Samyang Foods, stated that there were no plans to raise prices even if reciprocal tariffs were imposed. A representative from Samyang Foods said, "We are monitoring the government's negotiation process while preparing countermeasures through a related task force (TF) by calculating the cost structures in overseas regions in advance."
Daesang, which has secured the top position in the global kimchi sector under the 'Jongga' brand, is also not free from the effects of tariffs. Daesang established a factory in Los Angeles, U.S., in 2022 and expanded local production by acquiring a local company, Lucky Foods, in 2023; however, it is still reported that the export volume of Korean products is twice that of local production.
The cosmetics sector, popularly referred to as 'K-beauty,' is experiencing a similar situation in the U.S. It has been increasing its market share through high-quality and low-price strategies, but there are concerns that the competitiveness based on pricing will weaken if tariffs are imposed.
According to the Ministry of Food and Drug Safety, the export value of cosmetics in the first half of this year was $5.5 billion (approximately 7.5 trillion won), marking a 14.8% increase from the same period last year and setting a new record. Exports to the U.S. amounted to $1.02 billion (approximately 1.38 trillion won), a 17.7% increase from a year ago, and accounted for 18.5% of total exports. U.S. cosmetics exports have more than doubled over the past five years.
Cosmetics OEM (Original Equipment Manufacturer) companies plan to increase their local production volumes if tariffs are confirmed. Kolmar Korea has increased its annual production capacity to 300 million since starting operation at its second factory in Pennsylvania last month, a 66% increase compared to the previous capacity of 180 million.
COSMAX also plans to increase local production centered around its U.S. subsidiary, COSMAX USA. The COSMAX USA factory in New Jersey produces approximately 280 million products each year, accounting for about 10% of the company's total production.
However, LG H&H and Amorepacific, which do not have production bases in the U.S., will have to bear the burden of the tariffs. Amorepacific plans to invest in production and logistics facilities in the U.S. within the next 3 to 5 years.
Although LG H&H has not yet announced plans to invest in North American production facilities, it recently decided on a capital increase of $130 million (approximately 180 billion won) for its U.S. subsidiary LG H&H USA, aiming to strengthen local distribution channels. LG H&H USA is launching its major brands in large beauty multi-stores in the area.
A representative from the cosmetics industry noted, "Recently, domestic companies are expanding their business scope from online to offline in the U.S., aiming for growth and stabilization. They must enhance brand recognition and loyalty to alleviate the burden of tariffs."