Coca-Cola says Trump tariffs could force it to increase use of plastic in US

Wed, 12 Feb 2025, 09:20
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Coca-Cola has said it may have to increase its use of plastic in the US, if Donald Trump’s tariffs raise the cost of aluminium cans.

The drinks company’s warning follows Trump’s

introduction of 25% tariffs

on foreign steel and aluminium entering the US, which could push up the prices of canned food and drink.

Coca-Cola’s chief executive, James Quincey, said it imports aluminium for its drinks cans from Canada, meaning it is looking for ways to mitigate any price rises resulting from the tariffs and could be forced to switch to plastic bottles.

Related:

Canada, Mexico and EU criticise Trump’s metal tariffs amid fears of trade war

“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 told investors.

“For example, if aluminium cans become more expensive, we can put more emphasis on PET [plastic] bottles, etc.”

The Coca-Cola boss, however, also sought to play down the potential impact of tariffs on the business, saying that packaging only accounted for a small part of total costs.

“I think we’re in danger of exaggerating the impact of the 25% increase in the aluminium price relative to the total system,” Quincey said on the company’s earnings call.

“It’s not insignificant, but it’s not going to radically change a multibillion-dollar US business, and packaging is only a small component of the total cost structure.”

Trump imposed tariffs on foreign steel and aluminium imports

in 2018 during his first term

in office, although many drinks can makers won exemptions from penalties. This time, he has insisted that the tariffs would be enforced

“without exceptions or exemptions”

.

Coca-Cola has

previously been found

to be among the world’s most polluting brands when it comes to plastic waste, according to researchers and environmental groups. It has gradually increased the volume of its drinks sold in aluminium cans in recent years, as part of its sustainability targets.

However, only just over a quarter (26%) of its drinks were sold in aluminium and steel containers in 2023, according to the company’s most recent environmental update, a slight increase on the previous two years.

Meanwhile, almost half (47.7%) of its beverages were sold in plastic bottles in 2023.

Separately on Tuesday, Trump signed an executive order

bringing back plastic drinking straws

, ending a US government edict to replace them with paper straws as part of efforts to phase out federal purchases of single-use plastics.

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