Transcript for:
Coca-Cola's Potential Relocation due to Tariffs

The drinks in the US are made by American workers in American factories largely all with American inputs and the same would Coca-Cola CEO says it may ramp up use of plastic bottles and raise prices due to President Trump's he was uh a fantastic man but he understood immediately what I was talking about. Coca-Cola is a brand known to almost everyone around the world with its red and white logo that has been ingrained in consumers minds for years. This beverage giant considered one of the important symbols of American culture has announced that it will now relocate outside the US in an unexpected move. The reason is the tariffs and trade restrictions imposed by the administration of President Donald Trump. The company has stated that it finds the economic policies which have turned into a global trade war unsustainable. So, is this decision only significant for the business world, or is it also a major blow to Coca-Cola's American identity and global trade network? We will examine the details of the latest developments around the world together. Don't forget to subscribe to our channel, turn on notifications, and like our content to stay upto-date. Aluminum, one of the basic raw materials used in Coca-Cola's packaging, is one of the metals most affected by President Donald Trump's recent decisions to protect the country's industry. Aluminum imported from many trading partners, primarily Canada, has been subject to additional tariffs of up to 25%. This increase represents a significant cost burden for Coca-Cola, which produces billions of cans annually. The company is not solely dependent on aluminum. The sweeteners and flavorings used in its formula are also imported from regions such as Latin America and Asia. Trade tensions between the US and these countries have led to tariff increases. As a result, Coca-Cola's supply chain has been disrupted by complex customs procedures, rising costs, and unpredictability. Seeking to rectify the situation, Coca-Cola's management tried short-term solutions. They wanted to source some raw materials from local producers or find new suppliers in different countries. However, the global market is not that flexible. Raw material prices are rising, logistics costs are increasing, and the company's margins are shrinking. The company's CEO, James Quincy, stated, "We cannot bear these costs indefinitely. Even if we raise prices excessively, we will lose our consumers." Statements from the White House say that these tariffs are intended to strengthen US industry. President Donald Trump insists that domestic producers are unable to compete due to import pressure and that these policies protect domestic industry. Indeed, some domestic producers in certain sectors such as steel and aluminum may have benefited from these policies in the short term. However, the situation is different for companies with an international presence such as Coca-Cola. The supply chain is globalized and when it becomes difficult to operate based on the protectionism of a single country, the company's global strategy is shaken. However, the White House expects these companies to show loyalty. Some senior officials in the administration even defend the thesis that if you are an American brand, you must stay in the US. Coca-Cola, on the other hand, believes that it is too large an organization to be shaped by the interests of a single country. How applicable are President Trump's words, we will impose heavy sanctions on those who leave the country and seek tax advantages elsewhere. In the case of Coca-Cola, this is where the real debate heats up because Coca-Cola's departure would be a major blow both symbolically and economically. Born in Atlanta at the end of the 19th century, Coca-Cola boosted the morale of American soldiers during World War II and became a symbol of freedom throughout the Cold War. It is in every sense of the word an integral part of American culture with many of its ads featuring holiday themes, family values, and national symbols. The slogan coke is it has become one of the most recognizable marketing phrases in the world. Now, this massive brand is saying since the business conditions are unfavorable, we're moving our operations to a more favorable country. This is akin to a brand that embodies the American dream relocating due to the economic policies that have turned that dream into a nightmare. While reactions such as, "How can Coca-Cola be leaving?" are rising within American society, the company's executives are responding, "We are a global brand. If the country you call our homeland imposes trade restrictions, we have no choice but to leave." This cultural clash is met with emotional reactions domestically, such as, "You're our symbol, aren't you, anymore," and internationally with the thought that even America can't hold on to companies of this scale. Imagine another American icon like Disneyland or McDonald's leaving for similar reasons. That's how shocking Coca-Cola's departure is. The most discussed topic in economic circles is whether Coca-Cola's move will set an example for other companies. Aggressive tariffs in the US are not limited to aluminum and steel. Protectionist measures spreading to or potentially spreading to other sectors can make imports more difficult while also increasing production costs domestically. Many multinational companies are feeling similar pressures. Automotive giant Ford, tech giant Apple, and agricultural equipment manufacturers are also expressing similar concerns. If even a giant brand like Coca-Cola is forced to relocate, the question arises, why should others stay? This could put the US economy at serious risk of a brain drain and capital flight. Of course, this scenario may seem exaggerated. After all, the US is still a large consumer market with advanced infrastructure and a financial center. However, even the thought that Coca-Cola might leave is a source of concern in itself. According to reports from the company, Coca-Cola is planning to move to a country with a strong logistics infrastructure, political stability, and multiple trade agreements. European countries such as Germany, the Netherlands, and Switzerland are frequently mentioned. Some investment analysts comment that centers such as Ireland, and Singapore, which have lower taxes and flexible labor restrictions, may also be preferred. However, the company may be targeting a location with a large population and a strong domestic market. The chosen location will facilitate trade with the EU or other regional countries while creating new procedures for its commercial relations with the US. Innovations tailored to the taste preferences of consumers in nearby regions could also be developed. For example, regulations on sugar and artificial sweeteners are stricter in Europe, which could push Coca-Cola toward formulas with less sugar. If it moves to Asia, plant-based beverages and local flavors like green tea extracts could take center stage. American consumers may have to pay more for Coca-Cola and perhaps have fewer options. Tariffs impose additional costs on products not manufactured in the US. If the company produces abroad and ships to the US, new taxes and increased shipping costs will drive up shelf prices. The picture is bleaker for workers. Thousands of bluecollar workers at Coca-Cola's US factories face the threat of jobs moving overseas. While state governments and unions may say, "Let's keep the company here and support it with tax incentives." If the business environment isn't attractive enough to convince the company, Coca-Cola's departure may be unstoppable. It remains unclear whether there is a sufficiently strong alternative manufacturing sector to compensate for the lost jobs. On the other hand, rival brands like Pepsi could try to win over local consumers by saying, "We're not considering such a radical move." Even local boutique soda brands could appeal to nationalist consumers by declaring, "We're American." The balance in the cola market could shift in this way. The country Coca-Cola chooses for its new headquarters will not only offer tax advantages, but also differentiate itself through environmental and labor regulations. For example, the European Union has stricter rules than the US regarding plastic waste, recycling, and carbon emissions. This could force Coca-Cola to adopt a more sustainable but potentially more costly production model. On the other hand, the company could strengthen its global image by presenting itself as more environmentally friendly and gain prestige among consumers in various European countries. This could contribute to the eco-friendly Coca-Cola image in the long term. However, if a cultural clash arises in the US domestic market with reactions like, "What happened? You left us and now you're following European rules." The company's communication strategy could face challenges. The departure of a giant like Coca-Cola is not seen as an individual company decision, but also as a political gesture. The Trump administration could face criticism such as these tariffs were in the US's interest. But here's a big company that doesn't want them and is leaving. Some might ask, what about our national identity? Are we going to set policy based on a company's whims? At this point, the answer to the question of whether the state manages the company or the company manages the state is more blurred than ever. On the one hand, governments set policies and impose taxes in the name of national interests. On the other hand, companies consider themselves global players and have the freedom to relocate to any country they choose. Both sides have leverage. The government has taxes and regulations while the company has capital and employment. This conflict is clearly evident in the Coca-Cola case. The relocation of America's most recognizable brand for centuries sends a diplomatic signal that the US is no longer as attractive an investment environment as it once was. Mexico, Canada, or EU countries could use this as propaganda, saying, "See, even big brands prefer our stable trade environment." The US's image as a businessfriendly country could be tarnished. And in trade agreements, the argument could be made that so many customs duties are driving even large companies away. Similarly, the country Coca-Cola moves to could gain diplomatic strength. It could gain prestige at international tables by saying it's not just a factory, it's the headquarters of a global brand. If this country is an EU member, it could gain additional bargaining power in EU trade agreements. In short, even a company's move can influence global diplomacy. Coca-Cola's decision to leave the US and relocate to another country is a decision that sits squarely in the midst of debates about the American dream and the era of protectionism. Some commentators say this is the end of an era. The world can no longer keep even the most iconic American brand within its borders. While others argue Coca-Cola was already global, equating it with the American flag was an exaggeration. The truth, as always, lies somewhere in between. The company is taking this step to protect shareholder interests, reduce supply chain costs, and remain competitive in the long term. President Donald Trump's trade policies were a factor that accelerated this move. The full consequences have yet to emerge. It remains unclear which country they will move to, how many jobs will be lost, and how relations with the US will unfold. This development which has economic, cultural, and political dimensions once again raises the question of what the concept of an international company really means. Will the boundless power of a brand that wants to exist in the global market despite its local roots prevail? Or will the price of protectionism in the name of national interests be too high? Only time will tell whether other giants will make similar decisions in the future. Will Coca-Cola's departure harm the US economy in the long term? Or will it perhaps pave the way for new startups to rise? Questions such as whether customs duties are a successful national protection policy or a strategy that drives companies away will also find answers in this time frame. What are your thoughts on this matter? Please share your opinions in the comments section. 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