Leaders of soda makers, local breweries and major automakers across the U.S. are scrambling to prepare for the impacts of incoming tariffs on steel and aluminum imports that are essential to their production. Announced by the Trump administration earlier this week, the 25 percent tariffs are expected to take effect on March 12.
“Our nation requires steel and aluminum to be made in America, not in foreign lands,” President Trump said while signing the measures on Feb. 10. Unlike similar policies ordered by Trump in 2018, the new tariffs won’t carve out exemptions for trading partners like Canada and Mexico.
Canada, the largest supplier of steel and aluminum to the U.S., is planning on responding to the “entirely unjustified” measures, said Prime Minister Justin Trudeau yesterday (Feb. 11). Mexico also questioned the fairness of the tariffs, while the European Union has vowed to enforce “firm and proportionate countermeasures,” according to a statement from Ursula von der Leyen, president of the European Commission.
Plastic bottles over soda cans
Domestic companies, too, are formulating response plans to the trade barriers. In light of levies on aluminum imports, Coca-Cola (KO) may consider manufacturing more soft drinks in plastic bottles instead of aluminum cans. “If aluminum cans become more expensive, we can put more emphasis on [plastic] bottles,” CEO James Quincey told analysts yesterday. “As commodities change for whatever reason, up or down, obviously our number one objective is to look at how we mitigate through that.”
Quincy assured analysts that that packaging changes won’t have a major impact on the soft drink company. “It’s not insignificant, but it’s not going to radically change a multi-billion-dollar U.S. business.”
Will beer prices go up?
Aluminum and steel are also key to breweries, warned the Brewers Association, a trade group representing thousands of craft brewers in the U.S. Early 2025 sales data shows that aluminum cans accounted for nearly 75 percent of packaged craft beer in volume and revenue, according to a Feb. 10 blog post from Katie Marisic, the association’s senior director of federal affairs.
Given that aluminum can prices were impacted in 2018 even with Canada’s exemption, this round of levies will “undoubtedly” increase aluminum product prices, according to Marisic. She noted that as Canada and Mexico make up nearly 40 percent of U.S. steel imports, impacts will also be felt for domestic manufacturers of kegs, steel tanks and brewhouses.
“Even without retaliatory tariffs, small and independent breweries that export beer to Canada have already seen the impacts of tariffs, with some provinces canceling shipments of U.S. alcohol beverage products or encouraging consumers to buy Canadian-made products,” said Marisic, adding that U.S. breweries could additionally face retaliatory tariffs on their exported brews.
“Chaos” in the auto industry
CEOs of leading car companies in America, meanwhile, are concerned that Trump’s tariffs could upend an entire industry. “What we’re seeing is a lot of cost, and a lot of chaos,” said Jim Farley, CEO of Ford (F), while discussing the administration’s measures during an investment conference yesterday, as reported by CNBC.
Although he highlighted that much of the automaker’s aluminum and steel materials are domestic, Farley conceded that costs could still be strained due to some of Ford’s suppliers sourcing materials globally. These impacts would be further compounded by an additional 25 percent tariff on nearly all goods from Canada and Mexico that Trump has threatened to enforce by the beginning of March.
Such measures could “blow a hole in the U.S. industry that we’ve never seen,” said Farley. While speaking at the same conference, Ford’s incoming chief financial officer Sherry House reportedly added that the car company will await potential impacts before making “large decisions.”
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