Donald Trump's new tariffs have caused the price of cans of Coke to rise, according to the CEO of Coca-Cola.
"We had to take with our bottling partners an increase [in prices] in our sparkling beverage industry in the middle of the year, which is relatively uncommon," said CEO James Quincey on CNBC's Squawk on the Street TV show. "That's the metal steel and aluminum going up. The labour going up."
"The tariffs on the metals, it's one of many factors [that] cost us to go out in the middle of the year and announce a price increase.
"We're very focused on creating local businesses, with local factories, with local jobs, with local blue collar.
"Less trade and more tariffs will mean less economic growth in the end and that will affect us."
Trump has imposed tariffs on imported steel and aluminium entering the United States from Mexico, China and the European Union, causing other economies to impose their own tariffs on American goods - effectively sparking a trade war.
The costs of canning Coca-Cola is handled by outsourced firms, but the trickle down effect of them having to pay more for raw materials has been passed on to Coke and, potentially, onto customers.
Retailers "have discretion in what consumers are charged on the shelf," according to Coke spokesman Scott Leith, so prices at the consumer side may not rise immediately.
The rise in prices might be bad news for Coca Cola, but in general they have been doing very well indeed, and announced second-quarter revenues that exceeded expectations yesterday.
Shares rose by 2.3% as a result and the company said that their net revenue over the time period was $2.32 billion - an increase of almost a billion dollars on the same period last year.
They attributed the success to diversification, better performance in the juice and energy drink markets and the marketing plan scheduled around the FIFA World Cup.
"I think the juice thing will start to improve as we get into the back half. We'll do better competitively. And I think the consumer environment will adjust to the new packaging in the new price points," said James Quincey.
The potential price rise in Coke could have one interesting victim: Donald Trump himself.
The President of the United States is said to drink a dozen cans of Diet Coke a day and even has a special button installed on his desk that signals for someone to bring him Cokes.Featured Image Credit:
Topics: US News, Donald Trump