The United States imposed a 50% tariff on Canadian cosmetics and hundreds of other product categories, including textiles and machinery, on August 22, 2026, one day after bilateral trade negotiations broke down. The measures affect roughly $20 billion of Canadian exports annually, equivalent to about 5% of total US imports from Canada. Three presidential proclamations signed on July 20 invoked Section 338 of the Tariff Act of 1930, a provision designed to address discriminatory foreign trade practices that has not been meaningfully used in decades. The action effectively overrides recently negotiated USMCA (United States-Mexico-Canada Agreement) protections. Canada responded with retaliatory tariffs of up to 50% on approximately $20 billion of US imports, with selected measures starting September 8, 2026. Beauty companies including L’Oréal, which has manufacturing facilities in Quebec, and Estée Lauder, whose Canadian-origin brands include MAC Cosmetics and Deciem, may face higher costs. The cross-border beauty supply chain often moves ingredients, packaging, finished products and proprietary formulations between the two countries multiple times. Smaller brands using Quebec contract manufacturers may be least able to absorb prolonged tariffs while financing relocation. The dispute also puts the USMCA’s predictability to the test, with Mexico watching whether its own protections remain durable.