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.


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.