Coca-Cola says it may use more plastic bottles if Trump tariffs on aluminum take effect

President Trump’s tariffs on aluminum could make Coca-Cola more expensive. 

Coca-Cola CEO James Quincey said the company imports aluminum for its cans from Canada, and is looking for ways to mitigate any price increases that new tariffs could bring. Mr. Trump on Monday announced a 25% tariff on steel and aluminum. 

Quincey said on the company’s earnings call Tuesday that if the tariffs go into effect, making aluminum cans more expensive, the company could start selling more beverages in plastic bottles. 

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

Quincey also said the impact of the new tariffs could be negligible. 

“I think we’re in danger of exaggerating the impact of the 25% increase in the aluminum price relative to the total system,” he said on the company’s earnings call. “It’s not insignificant, but it’s not going to radically change a multibillion dollar U.S. business, and packaging is only a small component of the total cost structure.”

Coke could also start sourcing aluminum domestically, and raise consumer prices. Quincey noted that Coke already has “hedging programs” in place.

“As the relative prices of different sources of ingredients and imports change, of course we look at mitigation, productivity, efficiency, adjusting where we get our materials from. All of that goes into the equation to constantly manage how this goes through,” he said.

Mr. Trump’s aim in announcing the tariffs is to protect U.S. manufacturing. “Our nation requires steel and aluminum to be made in America, not in foreign lands. We need to create in order to protect our country’s future resurgence of U.S. manufacturing and production, the likes of which has not been seen for many decades,” Mr. Trump said on Monday.

Aluminum is generally more recyclable, and less expensive than plastic. Coke has come under fire for its single-use plastic production, and late last year cut its sustainability goals. The beverage giant is now aiming to use 35% to 40% recycled material in packaging by 2035, revised down from an earlier goal of 50%.