Tariffs

A Jump in Soda Prices Should Make it Clear that Tariffs Are Just Taxes on Ourselves

Don't blame progressive city leaders for this increase.

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Coca Cola plant in Portugal
Global Media Group/Sipa USA/Newscom

You don't have to go to progressive-run cities like Philadelphia and Seattle anymore to have economic ignorance drive up the cost of your sodas.

Coca-Cola has announced that, partly due to increased tariffs on metal imports, the prices of its sodas will be going up. The company is being vague about how much of a price hike we should expect, but tariffs of 10 percent have been implemented on imported aluminum and 25 percent on imported steel—and that's not even getting into how the trade barriers might affect how much the soda ingredients cost.

Coca-Cola Chief Executive Officer James Quincey says he expects bottlers and retailers to pass the increased prices of the sodas onto consumer, but what that looks like may vary from store to store and community to community.

Some press coverage has needled President Donald Trump about the fact that his favorite soda (Diet Coke) is going to increase in price, as if Trump notices or cares or even knows how much a can of soda costs. What people should really take note of is how this easily predictable consumer response matches the consequences of soda taxes levied in cities across the country.

City leaders have been acting shocked at what happens when you deliberately drive up the cost of selling a product. Back when Philadelphia introduced 1.5 cent-per-ounce tax on sodas, the products' prices naturally skyrocketed. Mayor Jim Kenney then had the gall to turn around and accuse local businesses of "gouging" customers because they jacked up the prices. In Kenney's brain, the businesses were just going to pay the taxes to the city and then absorb the costs. But these new taxes were way too high to be absorbed. The tax increase on a box of soda syrup was more than twice the amount of profit sellers had been making.

You might think Trump's tariffs would make it clear that tariffs are ultimately a tax on ourselves. And you might think that those on the left who rage against the president's policies would then grasp that soda taxes, like Trump's tariffs, end up rolling downhill and hurting poor and working-class Americans. But that would involve people taking time off from trying to "own" each other and instead pay attention to policy outcomes.

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  1. The bigger story is that Coke is made out of aluminum and steel!

    1. Yeah, that threw me too.

    2. its how it gets that *bite*. What, you thought it was carbonic acid?

    3. Because coca leaves are illegal. Duh.

    4. My grandfather use to bust my chops by asking me how I could drink that stuff when he used Coke to take the rust off his car.

      1. In the final analysis, if Americans drink less soda, that would be a GOOD thing. If it hurts their budget, it’s as much a tax on being stupid as it is a tax on soda.

        Given that the price of the material in a can is tiny (Sides are only about 75?m thick! see https://www.youtube.com/watch?v=hUhisi2FBuw)

        They get about 32 cans per pound of aluminum, and aluminum costs about 60 cents a pound, so current prices are about 2 cents per can for materials. A 10% hike would take that all the way up to 2.2 cents, which would mean the price of a case of 24 cans would go up by a little less than a nickel.

        With Coke going for about $9 a case, that nickel is a whopping 0.55% increase in price – substantially less than the variation in price from retailer to retailer.

        In short – it’s all bullshit.

        1. It depends on the drop, if they’re running 50% drop then the price could go up a whole percent, maybe a tad more. I think it’s the steel caps on the bottles that’s driving the cost though.
          Pity they can’t just substitute something else like they substituted corn syrup for sugar because we pay more than double the real cost of sugar.

        2. Holy shit! $9?

          I pay $2.50 for a 12 pack of soda. Add in tax of 6%.

  2. And you might think that those on the left who rage against the president’s policies would then grasp that soda taxes, like Trump’s tariffs, end up rolling downhill and hurting poor and working-class Americans.

    That’s the intention, isn’t it? To discourage poor people from consuming unhealthy products by raising the cost?

    Because soda taxes are enacted with good intentions, they are by definition good.

    Trump on the other hand is a terrible person, which means he does things with bad intentions. Tariffs? Tax cuts? Hair plugs? Strippers? Doesn’t matter. If he did it, then he had bad intentions because he’s a bad person, which makes whatever he did bad! Baaaaaaad!

    Jeez. It isn’t that hard.

    1. Oh, I get it! When Bernie Sanders demands tariffs and unfree trade, that’s a good thing because he has good intentions. But when Trump implements the exact same things Bernie demand, it’s a bad thing because he was not Hillary and thus does not have good intentions. Whoa!

      1. Trump offered to end trade restrictions if trading partners ended trade restrictions. They refused.

        Colonel Sanders never offered to end trade restrictions.

        1. Trump offered to end trade restrictions if trading partners ended trade restrictions. They refused.

          You say that a lot. Because governments of trading partners refused to make imports cheaper for their people, that justifies Trump making imports more expensive for Americans. Or something. I still don’t get it.

          1. I know. You dont want to believe that Trump offered free trade and was refused.

            1. Why does it matter?

              He is punishing Americans for the refusal of foreign governments to stop punishing their own people.

              It’s dumb.

              1. You dont know why it matters?

                If our trading partners accepted the deal to end trade restrictions. We could have zero trade restrictions.

                Trump and the USA have all the Hand. The EU knows this and China knows this.

                Its about getting the best possible trade for the USA.

                Freedom isnt free.

                1. If Trump just got out of the way we’d have been better off.

                  You keep saying ‘freedom isn’t free’ but I don’t see why I’m paying to help free the people of other countries. Because that’s what is happenong here. Some other country is using its power to screw over its own people but you’re demanding that I sacrifice to stop it.

                  1. Got out of the way? You make it sound like these tariffs were well on their way to being repealed and Trump put a stop to it.

                    What’s the non-violent libertarian response to tariffs? A strongly worded letter? And if that doesn’t work, then what?

          2. To understand it you’d have to understand that we’ve been in trade wars ever since trading existed. Each country tries to maximize their own benefit in all trade deals. They didn’t start with Trump. They will not end with Trump.

            1. That assumes that any and all tariffs are proof of a trade war, and I’m sorry but I don’t buy that premise. Especially when tariffs were on the decline.

              A trade war is when governments go tit-for-tat with tariffs, like what is happening now. “You want to tax Americans who buy Chinese steel? Well we’re gonna punish Chinese who buy American soy beans! Waddaya gonna do about it, huh?”

              That is a trade war.

              1. Tariffs might have been on the decline but trade restrictions were on the rise.

                Tariffs dont paint a complete trade restriction picture.

                The “trade war” has been going on for decades.

                If it is a “trade war” dont you want to win a war?

                1. no. you just stop responding. despite using the term ‘war’, a trade war is not a war. You’re always better off not ‘fighting’. Just stand there offering to buy and sell while the other side shoots itself in the foot over and over.

                  Turning around and going ‘oh yeah? I can shoot myself in the foot harder’ is not a winning strategy in trade.

                2. If it is a “trade war” dont you want to win a war?

                  I use the term because it is what people understand. However it is not what I would call a war. After all, the winner is the one who levies the most punishment on it’s own people.

                  The goal of a trade war is to restrict imports. Take that to its logical conclusion, and a country would set up cannons in all its ports to sink vessels coming with goods for trade.

                  It’s stupid.

                  To say that Trump’s tariffs are justified because others didn’t want to totally get rid of theirs is equally stupid.

  3. A Jump in Soda Prices Should Make it Clear that Tariffs Are Just Taxes on Ourselves
    Don’t blame progressive city leaders for this increase.

    Shackford’s deflecting all of the Lefty’s trade barrier costs in one article. Good job!

    Soda taxes, costly Socialist trade restrictions pre-Trump, and massive Nanny-State regulations on soda manufacturers.

    1. costly Socialist trade restrictions pre-Trump,

      If the pre-Trump tariffs are socialist, then Trump’s tariffs are _________?

      1. Awesome?

      2. Making America Great Again?

      3. costly Socialist trade restrictions pre-Trump,

        If the pre-Trump tariffs are socialist

        Tariffs are not the only type of trade restrictions. All tariffs are trade restrictions but not all trade restrictions are tariffs. (1) you did that on purpose. (2) you dont even know the difference.

        My money is on you (1) trying to manipulate the quote.

        1. so the pre-Trump trade restrictions wer costly socialist programs the the Trump Trade restrictions are . . .?

          1. Massive government regulation trying to control the means of production is socialist.

  4. Or, Coke could start buying their aluminum from domestic suppliers and avoid the tariffs altogether, as intended.
    There are 1000’s of laws and taxes intended to facilitate social engineering, these tariffs are not the worst of them.
    Because of ‘Trump Derangement Syndrome’ , however, these get the most coverage and lead to apoplectic outrage.

    1. This meeting of Libertarians For Protectionism, Tariffs, And Government Selection Of Economic Winners is going splendidly . . .

    2. but they can’t avoid the increase in cost – since domestic suppliers won’t sell as cheaply as the foreign ones.

      which is why they went to foreign supliers in the first place.

  5. “The company is being vague about how much of a price hike we should expect….”

    There’s a reason for that, Shack: it’s because the cost of the tariffs on the aluminum will amount to less than a penny per can.

    Furthermore, based on my observations most Coke products are sold in plastic bottles anyway, so the tariffs should have zero effect on the price of those drinks — unless Coke is looking for an excuse to raise their prices and is hoping to blame it all on Trump.

    1. It seems quite likely that the aluminum that goes into making cans is not Coke’s only expenditure for metal. The money to pay increased costs for building materials and machinery has to come from somewhere.

      1. You should see where your can of coke was bottled, since a lot of it isn’t bottled in the U.S.

        Does a coke plant in Mexico pay the U.S. tariff on aluminum, or the Mexican tariff on aluminum?

        1. both.

          since its importing aluminum into both Mexico and then the US

  6. “In Kenney’s brain, the businesses were just going to pay the taxes to the city and then absorb the costs.”

    This is every progressive/social-democrat’s wet dream.

  7. so what?

  8. Because of ‘Trump Derangement Syndrome’ , however, these get the most coverage and lead to apoplectic outrage.

    I thought they got the most coverage because the president is using social media to tout the policies, and because other governments are responding to his tariffs with tariffs of their own. You know, because it’s happening right now and in the news?

    No, you’re right. Gotta be TDS. Because this way when someone complains about the tariffs you can ignore their argument. Why bother to listen? They’ve got TDS.

    1. YOU have TDS because YOU refuse to admit that tariffs existed before Trump, trade restrictions existed before Trump, Trump offered free trade and was refused, Americans were already paying about market price more for products and services pre-Trump because of existing trade restrictions….

      1. Welfare, Medicare, and Medicaid existed before Obama. I guess Obamacare was justified in your mind then?

        1. That was weird even for you Leo. Just really bad logic.

      2. What is the point of the yappy little dog act you constantly pull with sarcasmic? Even when he agrees with your basic premise you scurry around chewing on his ankles.

        1. It’s because he can’t debate. So he has to wage war with ad hominems and straw men.

          1. Speaking of straw menz.

      3. I refuse to admit that the mere existence of any tariffs is a trade war.

        You are putting forth a false dichotomy: free trade or trade war.

        Between that, your shouting “Nanarchist! TSD! Aaauughh!” from the rooftops, and then putting words in my mouth and expecting me to defend them (straw man), you’re going to replace Tony as the Fabulous Fallacy Fellator.

        Or you could have an actual, you know, conversation?

        1. You claim that it’s no big deal when others do it to us and that we should just look the other way and ignore it, but when we do it to others that it’s potentially the end of the world. Why?

          1. Obviously you have no intention of ever answering that question.

            And I completely understand why: there is no rational answer that makes any sense!

            1. Obviously you have no intention of ever answering that question.

              Sorry, I was out.

              You’re looking at it from the wrong point of view. Look at it from the point of view of the consumer.

              From that point of view, when another country subsidizes exports, you win! They are fleecing their taxpayers for your benefit.

              When another country taxes imports, as a consumer how does it affect you? It doesn’t. So fuck ’em.

              However when your own country taxes imports, then you feel the effect. Stuff becomes more expensive. Domestic cronies have less incentive to compete, so quality of domestic goods stagnates. Jobs are lost when taxes cause the selling and using of imported goods to no longer be profitable.

              Now if you look at it from the point of view of the producer, then yeah tariffs in other countries suck. And yeah you want to get back by having your government enact similar punishment on foreign producers. But how is that different from any other kind of social engineering? Yeah, it sucks that your stuff is harder to sell over there, but does that justify punishing millions and millions of Americans who save money and live better by buying imports? I don’t think so.

            2. Then there is comparative advantage. When something is cheaper to import, that means they can produce it cheaper. It also means that if you have to produce it yourself it will cost more. Well, isn’t that the point of protective tariffs? To negate comparative advantage, and waste resources producing things at a higher cost? It’s basically Bastiat’s Broken Window fallacy. “Hey, hey! Look at all these jobs we now have producing what we used to import! So what if it costs more? So what if those people might produce more in some other advantaged sector? Look at the jobs!”

        2. Oh sarcasmic, you say its a trade war.

          You’ve said that you’re an anarchist.

          They have memory pills for people to help with memory loss.

          1. Oh sarcasmic, you say its a trade war.

            Yeah, because that’s what it is called in the English language. Whether it is a war or not is the debate.

            You’ve said that you’re an anarchist.

            Now you’re just lying.

            1. Minianarchist is anarchist.

      4. dude, see a doctor. You’re TDS is getting out of hand.

        1. No need. TDS affects those that hate anything good or bad simply because Trump did it or said it.

  9. Serious question, will Trump succeed in putting a spotlight on ALL tariffs or just create a bunch of sound and fury over a few select tariffs?

    1. Are you talking about the 1% of Americans who have some understanding of economics and trade, or the 99% who, if they think at all, can only see a specific and selfish need to implement or void a particular tariff?

    2. The serious answer: Trump has already made it clear that he supports the idea of all tariffs being eliminated on all sides, but he can’t force our “friends”, “allies”, and “partners” to do what they don’t want to do. He can threaten, intimidate, and cajole them, but only to a certain point.

      So is he likely to succeed in getting everyone to eliminate all tariffs? No, of course he isn’t, but nobody on the face of the earth is likely to succeed in accomplishing that impossible goal either.

      1. so, instead, he’s going to stir up shit, make things worse, and the we go back to the status quo ante? Rather than just eliminate tariffs and restrictions on the US side and drop the mic on the rest of the world?

        1. make things worse

          Fake news. He has already gotten a better deal with the E.U. than the one that was in place before. Juncker caved pretty quickly!

  10. What, no option to go back to using sand to make containers?

    1. Apparently not. When I was a youngster, I would walk around the hood and collect soda bottles then redeem those bottles for 2 cents at the variety store or bring them to the bottler and get 3 cents(there were three bottlers within 1.5 miles). At each plant there were around 5 people inspecting and operating cleaning machinery. In our small city ther were 2 Coke, 1 Moxie, and a Cott plant. Now there are zero. They actually reused the bottles.

      But because of Trump tariffs no glass bottles, no reuse, and no jobs! WTF.

  11. The markup on soda is insane. Not as much as water, but still insane.

    1. At McDonald’s it cost more for the paper cup than the soda it hold. Supersize for a buck was big profit.

  12. Wouldn’t this make buying American metal more attractive which would lower production prices, employ americans, and eventually drive competitor tarrifs and prices down? And or cause innovation.

  13. Good, maybe folks will start drinking tap water again.

  14. Tariffs: “See how badly I can fuck my people!”
    Retaliatory tariffs: “That’s nothing, I’ll grab them by the pussy and fuck them twice as hard because they want me to!”

  15. MAGA

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