Coca-Cola, Breweries and Automakers Prepare for Trump’s Tariffs

With the recent announcement of 25 percent tariffs on steel and aluminum imports by the Trump administration, soda makers, breweries, and automakers in the U.S. are bracing for the impact on their production processes. These tariffs, set to take effect on March 12, have sent shockwaves through various industries.

President Trump emphasized the need for domestic production of steel and aluminum, stating, “Our nation requires steel and aluminum to be made in America, not in foreign lands.” Unlike previous policies, these tariffs do not exempt key trading partners like Canada and Mexico.

The response from Canada, the largest supplier of steel and aluminum to the U.S., has been one of opposition. Prime Minister Justin Trudeau called the measures “entirely unjustified,” while Mexico and the European Union have also expressed concerns and intentions to retaliate.

Shift to Plastic Bottles

As companies strategize to navigate the trade barriers, Coca-Cola is considering a shift towards manufacturing more soft drinks in plastic bottles rather than aluminum cans in light of the tariffs. CEO James Quincey mentioned, “If aluminum cans become more expensive, we can put more emphasis on [plastic] bottles.”

While these packaging changes may impact the company, Quincey assured analysts that the core U.S. business of Coca-Cola will remain stable despite the alterations.

Impact on Beer Prices

The Brewers Association, representing craft brewers in the U.S., highlighted the significance of aluminum and steel for breweries. With a substantial portion of craft beer packaged in aluminum cans, any price increases due to tariffs could have a notable impact on the industry.

Small and independent breweries exporting to Canada have already felt the effects of previous tariffs, and the current situation poses further challenges. The potential for retaliatory tariffs on U.S. beer exports adds another layer of complexity for breweries.

Concerns in the Auto Industry

CEOs of leading car companies in America are expressing concerns over the potential disruption caused by the tariffs. The impact on costs and supply chains could create “chaos” in the industry, according to Ford CEO Jim Farley.

While Ford primarily sources materials domestically, the interconnected nature of global supply chains means that the tariffs could still have adverse effects. The looming threat of additional tariffs on goods from Canada and Mexico adds to the uncertainty faced by automakers.