What Happens When Business Leaves America

A thought exercise

Mr. TACO has done it again. He’s raised tariffs on steel and aluminum to 50%.

He’ll probably (maybe) reverse that decision. But in the event he doesn’t, let’s do a thought exercise…

What’s the real reason behind the tariffs?

It’s to replace the revenue lost from tax cuts through another tax. Tariffs are tax, just hidden.

What does it do? It spreads the tax further and wider than just on your income. It’s seeps into everything, gets double, triple, or more applied. Think of it: the components are taxed, the manufacture is taxed, the transport is taxed, the sale is taxed. Four Times Each Product is Taxed at Least Four Times. That is a simplification, yes.

But it makes the point. So instead of $1.00 for a can of Coke, you’ll be paying $2.00? $3.00? by the time you buy it in the store. What will it cost at a restaurant? $5.00?

Here’s the thing, Coca-Cola is now at the point that a 50% tariff on aluminum will raise the cost of producing cans so much, they are considering leaving the US and setting up elsewhere (probably Canada where they get their aluminum from).

Here’s a YT report on this very topic:

Let’s look at what such a move on the part of Coca-Cola means:

1. They will get their aluminum for less — sourcing it locally, not paying for transport, and not paying any tariff by making them in Canada. BONUS

2. The manufacturing jobs leave America. MINUS

3. The bottling plants will likely be sold off or closed in America. BONUS

4. American establishments, like stores, distributors, restaurants, etc. will then be solely responsible for importing the beverages produced by Coca-Cola. BONUS

5. The Board of Directors for Coca-Cola will be happier, because their profits on their product will be up.

6. Their sales may go down, especially if Americans don’t want to buy Coke for $5.00/can. MINUS

7. But Americans are very brand loyal people, so who knows, maybe they will. But can they afford to drink as much? That may actually be good for the people.

Do the bonuses outweigh the minuses?

One has to wonder what the actual intent of the tariffs are? Because, if Mr. TACO really wanted to boost American production, bring back American steel, increase manufacturing, he’d take a more productive approach rather than this scorching burn everything down approach.

Let’s face it, he’s not helping anyone, except himself.

So if the goal isn’t to boost American jobs, is it to force corporations to leave? That is the choice some are facing in the auto industry, now in the beverage industry. And how many others that are affected by this latest 50% tariff?

If American business starts packing up and leaving… there go the jobs. Things will get MUCH worse before they get better.

Business is not in the habit of making snap decisions either. They have to plan, take into consideration direction, the future, and ramifications. If they make the decision to leave, they won’t then stop and come back. Once that train is moving it’s going to go to its destination.

Companies can’t afford the on-again off-again politics of Mr. TACO. They’ll eventually say fuck it and leave.

The real problem is, Mr. TACO doesn’t even understand what he’s doing, he’s demented. He’s stupid, and he just wants what he wants. He is a big baby, screaming in the middle of the floor on his back and he can’t get up and he’s just pooped his diaper.

There is no plan. There is no policy. It’s ALL fly-by-the-seat-of-his-pants.

People try to impart ‘sense’ into his decisions. I don’t see any at all. It’s more like a toddler stomping off because he was told he couldn’t play with the something, so he goes and throws something else in a temper tantrum.

He doesn’t realize he’s playing with people’s lives and livelihoods. He doesn’t have the capacity to see what these decisions will impact. He doesn’t have the emotions to understand the pain he is inflicting. He is worse than a psychopath. (At least they are normally pretty smart, if devious.)

Companies like Coca-Cola and Pepsico are so big, they don’t have to stay in America. It’s where they were created, and America is their biggest market, but they are already in nearly EVERY country in the world. They have bottling plants everywhere. They have distribution everywhere. Only their corporate head offices (where they keep and produce their syrups) are in America exclusively.

I spent some time as a consultant at Pepsico’s HQ in upstate New York. I learned a bit about their company culture, and a little about Coca-Cola’s as a result. There is such a thing as the Cola Wars. But I digress. If one of them pulls out, the other will too, because it will give one of them an advantage the other won’t NOT take as well.

What about beer? Do you think companies like Anheuser-Busch (the largest brewer in America) or smaller ones like Pabst can afford to pay 50% more for their aluminum? Will they leave? Anheuser-Busch can, because they’re multi-national, Molson is Canadian, but Pabst, who is just a local Milwaukee, WI brewery (now in LA too).

This is so far-reaching for the beverage industry, it’s mind-boggling. Aluminum beverage cans are used in the huge energy drink industry, teas, coffees, and even sparkling water and canned wine. If you’re a Red Bull drinker, be prepared to pay double for your fix.

I’m watching this one with particular interest. There could be a bright side to this: Maybe it will slow down the obesity problem.