Trump Aluminum Tariffs Threaten AriZona’s 99-Cent Price Streak

AriZona Iced Tea, best known for its iconic 99-cent price point that has remained unchanged for over 30 years, is now at risk of breaking that streak due to new U.S. aluminum tariffs proposed by Donald Trump. The 50% tariff on aluminum imports could force the company to reconsider its price strategy, according to Don Vultaggio, AriZona’s founder and chairman. Vultaggio has previously resisted raising the price of the iced tea, despite inflation driving up costs for nearly all other goods. If adjustments were made to reflect the rising input costs, the iced tea would be priced at $1.99 today. However, Vultaggio has repeatedly expressed his reluctance, emphasizing that the product should remain affordable for consumers struggling with rising living expenses [1].

AriZona uses approximately 100 million pounds of aluminum annually for its signature cans, 20% of which comes from Canada [1]. Vultaggio has stated that unless Trump negotiates a reduction in the aluminum tariff with Canada, the company may be forced to increase prices. The founder has already taken other steps to cut costs, such as reducing the can size from 23 to 22 ounces. Still, the proposed tariff on aluminum could mark the final challenge for the 99-cent price tag [1].

The situation highlights the challenges faced by domestic manufacturers that rely on imported materials. AriZona, though nearly fully vertically integrated, imports a portion of its aluminum from Canada. PNC’s Chief Economist Augustine Faucher noted that the tariffs are likely to drive up costs for consumers in the short term, as companies pass on the increased input prices [1]. Faucher added that the aluminum industry is not a strategic priority for the U.S., given the high energy costs and inefficiencies of domestic production. According to him, the tariffs may inadvertently harm American manufacturers that rely on imported inputs, rather than supporting them [1].

AriZona’s experience could serve as a test case for how U.S. manufacturers are affected by policies that impose tariffs on key materials. The company’s unique business model—owning much of its production chain, including the railroad tracks used to ship sugar—makes it an unusual but telling example of how trade policy impacts even the most domestically integrated firms [1]. As Faucher explained, beverage makers like AriZona have limited options for mitigating the impact of tariffs, given the fast turnover of their products. Unlike industries that can stockpile inventory before tariffs take effect, beverage producers must absorb the cost increases immediately [1].

Vultaggio has long been celebrated for his commitment to affordability, even at the expense of profit margins. Yet, with aluminum costs “dramatically bumping up” due to the proposed tariffs, the pressure on the company to raise prices has never been greater. Whether the 99-cent price tag will remain intact remains to be seen, but the debate has already sparked discussions about the broader implications of protectionist trade policies on small businesses and consumers [1].

Source: [1] The 99-cent AriZona iced tea could be the next victim of Trump’s tariffs (https://fortune.com/2025/08/11/arizona-iced-tea-price-increase-trump-tariffs-aluminum/)