L'Oréal and other beauty companies are, per Reuters, considering the use of an old U.S. customs clause, known as the "First Sale" rule, to mitigate the financial impact of tariffs imposed by the U.S. government. The rule, which dates back more than 30 years, could provide a way to reduce tariff costs on goods imported into the United States.
According to law firm Miller & Chevalier, under the "First Sale" rule, companies involved in multi-tiered transactions can use the price paid in the initial sale—such as from a foreign manufacturer to a middleman—as the basis for customs valuation. This initial transaction value is often lower than the final sale price to U.S. importers, resulting in reduced tariffs.
The renewed interest in this decades-old provision comes as European companies face heightened tariffs under policies enacted by U.S. President Donald Trump. While a recent agreement with European Commission President Ursula von der Leyen reduced tariffs on most EU imports to 15%, this is still significantly higher than the average pre-Trump tariff levels.
