Tariffs & Bubbles: A Couple of Drinks, So It Goes.

So, the President is thinking about letting some of those steel and aluminum tariffs drift back down to Earth. Not because it’s the right thing to do, mind you. Just… a shift in the wind. A little less friction in the gears. It’s all gears, really. Everything is just gears turning, grinding, and occasionally needing a little oil. These tariffs, raised last June, were a Section 232 thing. A law, like any other law, designed to solve a problem that probably never existed in the first place. The Supreme Court’s recent fussing about other tariffs won’t touch these, though. Different rules for different apocalypses.

He’s considering lowering them on things like aluminum cans and steel ovens. Consumer stuff. The kind of things people buy when they’re trying to feel better about everything. Two companies that might benefit? Coca-Cola (KO +0.11%) and Constellation Brands (STZ +0.16%). It’s a strange world. You try to build a business, and then someone decides the price of metal is a political statement. So it goes.

How Does This Affect Coca-Cola?

Coca-Cola doesn’t actually make the soda, not really. They make the syrup. The dark, sugary promise. They sell that to people who bottle it, distribute it, and then convince you that it’s happiness in a can. It’s a neat trick. Keeps their margins high. Lets them pay dividends. It’s a capital-light model, they call it. Which is a fancy way of saying they let other people worry about the heavy lifting.

These tariffs don’t hit Coca-Cola directly, but they hit the guys who actually turn the syrup into soda. The bottlers. Higher costs mean higher prices, fewer promotions, less marketing. They might even ask Coca-Cola for a discount on the syrup. Which is like asking the ocean for a refund. If the tariffs stay, Coca-Cola’s sales will slow. They’re already talking about switching to plastic bottles. Which is just trading one problem for another. Plastic. Wonderful. So it goes.

And What About Constellation Brands?

Constellation Brands makes beer, mostly. Corona, Modelo. Good stuff, if you’re inclined. They do a lot of business in the United States, but they import a lot of their beer from Mexico. Which means aluminum cans. And tariffs. About 40% of their beer comes in cans. It’s a simple equation, really. Higher costs, higher prices. But people aren’t drinking as much beer, especially younger people. And their Hispanic customers, who buy a lot of beer, are facing their own pressures. They also sell wine and spirits, but that’s a different story. Another headache. Lower tariffs would help, of course. Make the stock a little more attractive. It’s not a cure-all, but it’s something. So it goes.

2026-02-24 22:43

How Does This Affect Coca-Cola?

And What About Constellation Brands?

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