Trump tariffs force Coca-Cola to consider more plastic packaging, price hikes

• Coca-Cola is considering either increasing its plastic use over aluminum in packaging or raising product prices. The decision would be in response to the Trump administration’s proposed aluminum tariffs.
• The new tariffs will raise aluminum import duties from 10% to 25%. They are set to take effect next month, potentially impacting production costs.
• Despite concerns, Coca-Cola’s CEO James Quincey stated that the tariffs ultimately may not significantly affect the company. He says packaging costs are a small part of its overall expenses.

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Coca-Cola may increase its use of plastic or raise beverage prices in response to President Donald Trump’s latest proposed tariffs. The new duties target imports of aluminum, which the company has been attempting to use more of in its packaging.

How are these tariffs expected to impact Coca-Cola?

During a recent earnings call, Coca-Cola CEO James Quincey stated that if aluminum prices rise due to the tariffs, the company is considering shifting toward more plastic packaging to maintain its consumer affordability. Coca-Cola discussed other strategies, including finding domestic aluminum sources or increasing product prices.

“As it relates to our strategies around ensuring affordability and ensuring consumer demand, if one package suffers some increase in input costs, we continue to have other packaging offerings that will allow us to compete in the affordability space,” Quincey said.

The proposed tariffs will increase duties on aluminum imports from 10% to 25%. They are expected to take effect next month.

Will Coca-Cola products become less sustainable as a result?

In recent years, Coca-Cola made efforts to use more aluminum due to its 100% recyclability. They introduced canned options for its Dasani and Smartwater products.

However, environmental groups such as Greenpeace have criticized the company’s use of single-use plastics, which has named Coca-Cola the world’s worst polluter for six consecutive years.

What happens next?

Despite the potential impact of the tariffs, Quincey noted that they also might not significantly affect the company. He said they are not expected to “radically change” a multi-billion-dollar U.S. business like Coca-Cola, as packaging is only a small component of the company’s overall cost structure.