The soft drinks industry is bracing for potential upheaval as former US President Donald Trump threatens to impose steep tariffs on Mexican imports, including cane sugar—a key ingredient for Coca-Cola.
Trump’s proposed 10% across-the-board tariff on all Mexican goods, if enacted, could significantly impact Coca-Cola’s supply chain. The company sources a substantial portion of its cane sugar from Mexico, where it operates bottling plants and maintains long-standing supplier relationships.
Why This Matters
Coca-Cola relies on Mexican cane sugar to sweeten its beverages, particularly in Latin America and parts of the US. A tariff would not only increase production costs but could also force the company to seek alternative suppliers, potentially disrupting its operations.
Industry Reactions
Analysts warn that such a move could lead to higher prices for consumers and strain trade relations between the US and Mexico. "This would be a major blow to the beverage industry," said one market expert. "Coca-Cola would either have to absorb the costs or pass them on to customers."
Meanwhile, competitors using high-fructose corn syrup—a cheaper alternative—might gain a pricing advantage, further complicating the market dynamics.
Political Implications
Trump’s tariff proposal is seen as part of his broader economic strategy, which often prioritises domestic production. However, critics argue that such measures could backfire, harming businesses that depend on international supply chains.
The situation remains fluid, with Coca-Cola yet to issue an official statement. Industry insiders, however, are already exploring contingency plans.
