US Politics
AriZona has been 99 cents for decades. Trump’s tariffs might change that
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AriZona Iced Tea has warned that, for the first time in almost 30 years, it may have to raise the price of its signature “Big Cans” from $0.99 because of Donald Trump’s tariff war.
Co-founder Don Vultaggio has said his company may finally have to disappoint customers and hike the retail price of its tallboy beverages, which have held steady since 1997, because Trump decides to place a 50 percent tariff on steel and aluminum imports.
“At some point, the consumer is going to have to pay the price,” Vultaggio told The New York Times of the president’s actions. “I hate even the thought of it. It would be a hell of a shame after 30-plus years.”
AriZona imports 20 percent of the aluminum used in its cans from Canada (the remaining 80 percent comes from recycled materials in the United States), meaning that rising costs could force it to change its pricing, however reluctantly.
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“Our price has been dramatically bumped up because of this tariff talk,” Vultaggio said, pointing out that the few domestic aluminum manufacturers are all but sure to hike their prices in response to Trump’s manoeuvring.
“I hope the administration understands and deals with the fact that if you’re going to protect American manufacturers, you can’t allow them to gouge the marketplace because of that protection. If I had Donald Trump’s ear, that’s what I would tell him directly.”
The company sells approximately 2 billion cans of drinks annually, according to the Times, around half of which are tallboys.
Had Vultaggio kept pace with inflation, AriZona’s Big Cans would currently retail for $1.99. Still, he has preferred not to do that, believing in building up repeat purchases through earned customer loyalty, a philosophy he says he learned working in his father’s grocery store in Flatbush, Brooklyn.
Asked by NBC’s Today Show last summer why he had never moved to raise his prices before, Vultaggio answered: “We’re successful. We’re debt-free. We own everything. Why? Why have people who are having a hard time paying their rent have to pay more for our drink?
“We’re going to fight as hard as we can for consumers because consumers are my friends.”
AriZona has yet to announce a tariff-enforced price hike and, for now, its owner says he is maintaining an phlegmatic outlook, telling the Times: “What happens, happens. We can find our way through it.”
Justifying his decision in June to raise the metals tariffs to twice that initially announced in April, President Trump said: “I have determined that increasing the previously imposed tariffs will provide greater support to these industries and reduce or eliminate the national security threat posed by imports of steel and aluminum articles and their derivative articles.”
Charles Johnson, president and CEO of The Aluminum Association, responded to the president’s decision by saying: “Re-establishing a more level playing field for domestic producers is critical, but a Section 232 tariff of 50 percent threatens to undermine the very industry the administration aims to support.
“The Aluminum Association, which represents the full industry supply chain and 70 percent of domestic production, urges the administration to reconsider today’s decision given the negative impact it will have on manufacturers.”
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Even before the president made his announcement, he received an open letter in February co-signed by the leaders of 20 can-based food and drink producers warning him of the unintended knock-on consequences of meddling with metal imports.
“We understand your efforts to use tariffs and other broad trade tools to level the global economic playing field and make our country’s economy great again,” the signatories wrote.
“However, the unintended consequences of these measures – if not properly tailored and implemented – are extremely detrimental to American food producers, farmers, and metal can makers and, hence, our nation’s food security.”
The prospect of AriZona having to raise its prices has already caught the attention of New York Democratic Rep. Ritchie Torres, who wrote on X on Sunday: “Since 1997, AriZona Iced Tea has proudly kept its iconic 99-cent price tag.
“For the first time in nearly three decades, Trump’s tariffs (effectively a tax on American consumers and businesses) threaten to double that price to $1.99. Trump promised to lower prices. Instead, he’s driving them up.”