What Donald Trump's tariffs will actually mean for the food and drink industry

Less than two months after being sworn into office, US President Donald Trump has been ruffling feathers with the introduction of divisive tariffs, which many fear will have a substantial ripple effect throughout the US and beyond.

This week, he implemented a 25 percent tariff on all steel and aluminium imported from the rest of the world, while the EU retaliated by announcing taxes on US goods as ‘countermeasures’.

Last month, Trump also signed executive orders imposing 25 percent tariffs on all goods imported from Canada and Mexico – including food and drink – along with a 20 percent levy on Chinese goods.

Amid concerns of a global trade war, many people are wondering how they could be affected – even if there doesn’t appear to be an overtly direct link.

The food and drink industry is one area that is already having to make drastic changes, both domestically in the US and on a global scale.

Price increases

While some businesses may choose to absorb the added costs themselves, economists say it’s likely American consumers will be the ones coughing up extra for certain products.

An estimated 70 percent of the steel used to make cans for beverages and tinned food comes from companies based in the EU, according to the US’ Can Manufacturers Institute (CMI), which means many of these goods could be hit by price hikes.

Robert Budway, the CMI’s president, warned in a press release: “Consumers will feel the inflationary impact of these tariffs at the grocery store.”

Plastic bottles over cans

Still, there are some other routes that can be taken, as these tariffs on steel and aluminium could also see drinks manufacturers forced to pivot to alternative materials - with Coca-Cola suggesting it may be forced to rely more on plastic bottles.

CEO James Quincey confirmed on an earnings call last month that tariffs were likely to increase the costs of Coca-Cola's soda cans, warning: “We are in danger of exaggerating the impact of the 25% increase in the aluminum price relative to the total system.”

However, Quincey sees these tariffs as a ‘manageable problem’, adding: “It is a cost. It will have to be managed. It would be better not to have it relative to the U.S. business, but we are going to manage our way through.”

Booze blues

In Canada, many retailers have been pulling US alcohol from shelves in protest against Trump’s taxation.

However, Jack Daniel’s maker Brown-Forman has argued that these boycotts are only proving more detrimental to the wider picture.

In the company’s quarterly earnings call earlier this month, CEO Lawson Whiting said: “That’s worse than a tariff because it’s literally taking your sales away completely, removing our products on the shelves.

“That’s a very disproportionate response to a 25% tariff.”

Meanwhile, Guinness maker Diageo said it would face a $200m hit on its gross organic profits between March to the end of June.

Around 45 percent of its net sales in the US stem from goods that are made in Canada and Mexico due to the nature of what it sells – a range that notably includes Canadian whisky and Mexican tequila.

“This is a huge issue for businesses trading with the countries imposing the tariffs,” Chris Southworth, secretary general of the International Chamber of Commerce UK, told The Grocer.

Rise of the ‘Canadianos’

On an arguably lesser scale, Canadian coffee shops are staging their own quiet protest on the recent tariffs.

A number of cafes are rebranding Americanos as Canadianos - a move that initially started as an act of national pride, but has since taken on an inevitably political significance.

It’s believed to have all stemmed from a cafe and roastery named Kicking Horse Coffee, which is based in British Columbia.

In a since-deleted Instagram post in early February, it shared a call to action asking others to join in with a radical rebrand of the Americano.

The cafe said: “For 16 years, the Kicking Horse Café has been quietly calling Americanos ‘Canadianos’.

“Today, we’re officially making it a thing and asking coffee shops across the country to make the switch. Join us. Call them Canadianos.”

It didn’t take long for the idea to catch on, with William Oliveira, owner of Cafe Belém in Toronto, saying he’s followed suit – having done so amid news of Trump’s tariffs.

He told Today: “I was worried that we were going to maybe attract the wrong clientele, people who were going to get very offended.”

When Oliveira changed the name on his menu a few weeks back, when the proposed tariffs were in people’s minds, he found that customers have mostly reacted positively.

“A lot of people were very gung-ho about it, standing up for being a Canadian at this time,” he explained, adding that Canadians don’t want to ‘let people believe that we’re people that can just be pushed around’.

Food writer Stephanie Gravalese argues that the move serves as a ‘quiet rebellion’.

“At first, it was a playful nod to national branding,” she wrote for Forbes.

“But after Kicking Horse’s post, the term ‘Canadiano’ started circulating online, sparking conversations about identity, food culture, and how even a coffee order can carry meaning."