On July 17th, US President Donald Trump announced that he had secured from Coca-Cola an agreement to replace high fructose corn syrup with cane sugar as the sweetening agent in Coca-Cola. This can be understood as part of the Trump administration’s ‘Make America Healthy Again’ initiative, which is partly characterised by increased scrutiny on the highly processed elements of Americans’ diet. However, simultaneous threats of increased tariffs on Mexican and Brazilian imports endanger the commercial desirability of Coca-Cola’s proposed reformulation, says GlobalData, a leading data and analytics company.
GlobalData’s recent report “Industry Insights: The impact of tariffs on consumer packaged goods” reveals which CPG-relevant sectors are most affected by tariffs within specific trade relationships and how companies in these sectors will be affected. It also provides insights into consumer reactions to changes in the market caused by the imposition of tariffs.
Rory Gopsill, Senior Consumer Analyst at GlobalData, comments: “The recent headlines indicate that the US’ reliance on sugar imports could become very damaging for US beverage manufacturers like Coca-Cola. This is because, over the last two weeks, the US threatened 50 % tariffs on Brazil and 30 % tariffs on Mexico. According to the Observatory of Economic Complexity, Mexico supplied 33 % of the US’ sugar imports and Brazil provided 23 %.”
From a tariff-focused perspective, corn syrup is more desirable than sugar for US beverage manufacturers. This is because the US can supply corn syrup demand with domestic production but relies on imports to meet sugar demands. According to GlobalData’s Crop Area Production and Yield database, the US devoted 36.5 million hectares of land to corn cultivation, more than any other country except China. This strong domestic supply means the US is a major exporter of corn and does not need to rely on imported corn to meet the needs of domestic manufacturers.
Conversely, the US imported $2.4 billion worth of raw sugar in 2023, while exporting only $230 million, according to the Observatory of Economic Complexity. While the US is the second largest cultivator of corn globally, it is the 10th largest cultivator of sugar cane, resulting in comparatively weaker domestic production capabilities that results in the country’s reliance on imports.
Coca-Cola caught between ‘Make America Great Again’ and ‘Make America Healthy Again’
The policy conflict places Coca-Cola in a precarious position. Shifting away from corn syrup – abundant and cheap thanks to US subsidies – and toward cane sugar would already involve reformulation costs, new supplier negotiations, and possible consumer backlash. Add to that an additional cost surge from trade barriers, and the proposition could begin to undercut itself.
Gopsill concludes: “Solutions for Coca-Cola could involve increasing the proportion of their beverage that is produced in Mexico, where sugar cane is the normal sweetener. This could limit the reformulation and supply chain adaption costs. Avoiding new tariffs on Mexican imports being added as a cost to their business seems an unlikely prospect if the US makes good on its 30 % threat. If USMCA-compliant goods remain tariff-exempt, Coca-Cola should maximise the volume of sugar/finished beverage products it imports into the US from Mexico that are USMCA-compliant.”
On 3 June 2025, the US announced it would impose 50 % tariffs on all steel and aluminum imports. This move represented an escalation compared to the 25 % tariff previously imposed on such imports on 10 February 2025. These policies create challenges for US manufacturers and users of packaging made of imported steel and aluminum. However, domestic recycling is enabling US aluminum can manufacturers to avoid the worst effects of tariffs, says GlobalData, a leading data and analytics company.
GlobalData’s recent report “Industry Insights: The impact of tariffs on consumer packaged goods” reveals which CPG-relevant sectors are most affected by tariffs within specific trade relationships and how companies in these sectors will be affected. It also provides insights into consumer reactions to changes in the market caused by the imposition of tariffs.
Rory Gopsill, Senior Consumer Analyst at GlobalData, comments: ” Unlike many other industries that rely significantly on metal imports, beverage can manufacturers in the US obtain a considerable share of their raw materials from recycled sources. The Aluminum Association reports that over 70 % of the aluminum utilised in domestic beverage cans is derived from recycled content. This closed-loop supply chain provides can manufacturers with a degree of insulation from US tariffs on imported aluminum as part of efforts to safeguard domestic industries and address trade imbalances with China and other exporting nations.”
In 2025, 99.6 billion rigid metal beverage cans are forecast to be sold in the US, according to GlobalData’s Primary Packaging and Outers Database. The Aluminum Association’s assertion that over 70 % of aluminum used in domestic beverage cans is recycled suggests that, of the total, 70 billion rigid metal beverage cans are made of recycled aluminum, leaving roughly 30 billion with significant exposure to tariffs on aluminum.
Tariffs create both opportunities and challenges for US recycling
Can manufacturers typically choose recycled aluminum over virgin aluminum because it is financially and environmentally less costly. This is because producing usable aluminum via recycling requires 95 % less energy than producing usable aluminum from scratch. In this respect, tariffs could create opportunities for US-based aluminum recycling plants as tariffs create yet more financial incentives for packaging manufacturers to utilise recycled materials. In other respects, however, tariffs create problems for the US’ recycling industry. For example, shipping recycled materials across national borders in North America is complicated by tariffs, with only US-Mexico-Canada Agreement (USMCA)-compliant goods being tariff exempt.
Gopsill concludes: “In a volatile economic climate, where global supply chains are increasingly politicised, the US beverage can sector’s embrace of recycled aluminum stands out as a model of resilience. By leveraging domestic, sustainable materials, the industry not only reduces environmental impact but also cushions itself from macroeconomic shocks – proof that circularity and competitiveness can go hand in hand.”
In an increasingly complex global landscape shaped by inflation, rising tariffs, and political volatility, consumer behavior is undergoing a profound transformation. Cost-of-living pressures and trade policy disruptions are not only fueling economic anxiety but also prompting tangible shifts in how and why consumers shop. These forces are accelerating a move toward value-driven decision-making, increased scrutiny of product origin, and a growing preference for local alternatives, according to the Q1 2025 consumer survey* by GlobalData, a leading data and analytics company.
Concerns over trade-related inflation are widespread. More than half (56 %) of global consumers say they are “extremely” or “quite concerned” about the impact of trade wars and import tariffs on the prices of the products they buy. This concern is even more pronounced in countries directly affected by US trade policy, including Canada (66 %) and Mexico (62 %). Despite being at the center of trade friction, China stands out for its lower levels of concern, with 40% of respondents saying they are not worried about tariffs, highlighting regional differences in public perception and economic insulation.
Prerana Manral, Senior Consumer Analyst at GlobalData, comments: “These concerns are not abstract. They are driving tangible changes in consumer behavior across everyday categories such as food, drinks, toiletries, clothing, and homewares. According to the survey, 54 % of consumers are now checking or comparing prices online before making a purchase, and 47 % are switching to cheaper brand alternatives.
“Private labels are seeing a notable rise, with 33% of consumers saying they are buying more store-owned brands to manage costs. Additionally, 38 % of shoppers are turning to discount retailers or cheaper outlets, while nearly one-third (32 %) have stopped buying certain products altogether because they have become too expensive.”
Manral continues: “Trade policy is no longer just an economic lever; it’s a force that is reshaping everyday consumer choices. What we’re seeing is a structural shift in how people engage with brands and pricing. Consumers are now making sharper, more value-conscious decisions, and many are actively abandoning higher-priced products or stores.”
Beyond pricing responses, the survey highlights a growing ideological and environmental awareness in consumer preferences, particularly around product origin. On average, 68 % of the respondents globally say they prefer to buy local products: 67 % cite price, or 65 % say environmental friendliness, as the main reasons, while 71 % say they do so to support local brands.
Political sentiment is also playing an influential role, with 58 % of global consumers* reporting that recent political events have made them more attentive to the country of origin of products they purchase. This intersection of cost-consciousness and conscious consumerism is emerging as a powerful force in a politically volatile economy. While affordability remains the entry point, values such as environmental impact and national loyalty are increasingly determining purchasing behavior.
Manral concludes: “As consumers increasingly respond to rising tariffs and price pressures by shifting toward local products and value-driven alternatives, FMCG companies must recognize this as a long-term behavioral shift rather than a temporary adjustment. To remain competitive and relevant, brands should invest in localized sourcing and production, expand affordable and private-label offerings, and strengthen communication around value, sustainability, and origin.”
*GlobalData 2025 Q1 global consumer survey, 22,000 respondents across 42 countries.
