Jody Serrano
Editor in chiefEditor in Chief at Xataka On. Before joining Webedia, I was a tech reporter at Gizmodo and The Messenger. While I've covered all sorts of things related to technology, I'm specialized in writing about social media, Internet culture, Twitch, and streamers.
It’s an age-old question: Pepsi or Coke? When it comes to President Donald Trump, the answer is clearly (Diet) Coke. In the near-future, more Americans may find themselves choosing Coke as well, though not because of preference.
It might simply be cheaper.
Pepsi’s dilemma. Like many other companies, Pepsi became an unexpected casualty of Trump’s trade policy, which imposed tariffs on more than 180 countries and territories. The tariffs on most countries—except China—are currently under a 90-day pause, but they will come into effect eventually.
While PepsiCo is an American company, it started making its concentrates—often referred to as the “secret recipe” of Pepsi—in Ireland in 1974 because of the country’s low corporate tax rate, according to The Wall Street Journal. Today, it makes nearly all of its concentrates in Ireland, the outlet reported, and ships them off to bottling plants worldwide from there.
PepsiCo’s strategy to save money may have worked for a few years, but it puts the company at a disadvantage during the Trump era. Specifically, it means that the concentrates its imports to the U.S. of Pepsi and Mountain Dew are subject to a 10% tariff.
How Pepsi makes Pepsi. As mentioned above, Pepsi isn’t made all in one place. The company makes the concentrate and then sends it off to the bottling plants it partners with. These bottlers mix the concentrate with water, bubbles, and sweetener to make the finished product consumers are familiar with. The concentrate is the most important part of this process: It’s what makes Pepsi taste like Pepsi.
Ireland isn’t the only place that Pepsi makes its concentrate. Per the Journal, it also makes concentrate in Texas, Uruguay, and Singapore. It’s unclear whether the company would shift some of its production to these locations or others to avoid the impact from tariffs.
Coke on top. Notably, Coca-Cola also produces concentrate in Ireland. However, the majority of its production for U.S. products takes place in Puerto Rico and Georgia, putting it at an advantage over PepsiCo—at least on this front. Both companies could potentially be impacted by the 25% tariff on aluminum imports Trump enacted in March.
When it comes to preference, Coca-Cola was Americans’ favorite soda in 2024, holding 19.2% of the market. It’s a spot the drink has held for decades. While Pepsi maintained its spot at number two (8.31%), it shared the spot with Dr. Pepper (8.34%).
The results were considered a blow for Pepsi, which had been in second place on its own almost every year for decades.
Bottom line. Pepsi’s debacle is potentially another example of how tariffs could affect American companies and consumers. In this case, the tariffs could increase Coca-Cola’s market share if PepsiCo has to raise prices.
It’s something that Trump already knows.
“We may have short term some little pain, and people understand that,” the president said in February.
Images | Ja San Miguel | Sachin Mittal
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