Coca-Cola may use more plastic bottles to offset Trump’s aluminum tariff, CEO says

Coca-Cola may use more plastic bottles in the future over cans in the wake of President Donald Trump’s 25% tariff on aluminum imports.

"We were being pummeled by both friend and foe alike," Trump said earlier this week as he signed two proclamations on aluminum and steel tariffs, changing his orders during his first term that go into effect on March 12. "It’s time for our great industries to come back to America."

Cola-Cola may use more plastic bottles

What they're saying:

During an earnings call on Tuesday, Coca-Cola CEO James Quincey indicated that the company may have to put more "emphasis" on plastic bottles to offset higher costs on packaging. 

"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 stressed the importance of not "exaggerating the impact" of the tariffs on the "total system," according to CBS News. He admitted that the price increase as a result of the tariffs was not "insignificant," but said it would not "radically change" the business and that packaging is "only a small component."

The backstory:

On Monday, Trump hiked his 2018 aluminum tariffs to 25% from 10%. He also removed the exceptions and exemptions from his 2018 tariffs on steel, meaning that all steel imports will also be taxed at a minimum of 25%. 

The moves are part of an aggressive push by the president to reset global trade, with Trump saying that tax hikes on the people and companies buying foreign-made products will ultimately strengthen domestic manufacturing. But the tariffs would hit allies as the four biggest sources of steel imports are Canada, Brazil, Mexico and South Korea, according to the American Iron and Steel Institute. 

Dig deeper:

Approximately half of all aluminum used in the U.S. is imported, with most of it coming from Canada, Reuters reported. Coca-Cola imports its aluminum cans from Canada and would face increased costs if Trump’s tariff goes into effect in March.