In today’s Finshots, we tell you how Trump’s idea of getting Coca Cola to swap its sweetener could end up denting the US agricultural economy.

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The Story

Just yesterday, we wrote about how the uncertainty around Donald Trump’s plan to lower US drug prices could rattle Indian pharma. And here we are again, talking about Trump. But we couldn’t help the repetition. Because right now, Trump is going after Coca Cola’s recipe.

Yup, the man who proudly drinks 12 cans of Diet Coke a day and even has a special button in the White House to summon a can at will, now wants the company to ditch high fructose corn syrup (HFCS) and switch to good old cane sugar.

His reason is simple. He thinks it’s time Americans cut down on ultra processed foods. And he’s calling for a return to whole foods and wants the food and beverage industry to clean up their ingredient lists. That means no artificial food dyes, no seed oils and no hyper processed sweeteners. All part of his latest campaign pitch to “Make America Healthy Again”.

And to be fair, his concern isn’t entirely baseless. Nearly 40% of US adults are obese, and about 10% fall into the severely obese category. And when people guzzle down sugary sodas by the gallon, switching to a more natural sweetener sounds like a step in the right direction.

But here’s where the argument starts to fall flat.

Swapping HFCS for cane sugar might sound like a health upgrade, but biologically speaking, it doesn’t change much. Both are made up of glucose and fructose in almost equal parts — 50:50 in cane sugar, 55:45 in corn syrup. And it’s the fructose that does most of the damage.

You see, unlike glucose, which gets processed by all cells in the body, fructose is mainly handled by the liver. Excess fructose gets converted into fat, particularly triglycerides, which are linked to heart disease. And since fructose doesn’t trigger insulin (the hormone that signals your body to stop eating) the way glucose does, you don’t feel full after consuming it. Which means you’re more likely to overdo it. Over time, that can lead to insulin resistance and Type 2 diabetes.

So even if cane sugar has slightly less fructose, the health benefits of switching are, at best, marginal. And unless people drink significantly less soda overall, the change won’t move the needle much.

But you know what it could do instead?

It could shake up the entire American agricultural system.

Let’s explain.

You see, the US runs on corn. It’s the world’s largest producer, consumer and exporter of corn, churning out nearly a third of the world’s supply. And corn shows up in just about everything from breakfast cereal and corn oil to popcorn, animal feed and even ethanol that fuels cars. Not to mention the infamous HFCS that sneaks its way into jams, sauces, baked goods and of course, soft drinks.

That’s simply because it’s cheap. Super cheap. Not because it’s easy to grow, but because corn is ridiculously abundant in the US.

But it wasn’t always this way. Back in the day, beverages like Coke actually used cane sugar.

But things started to change around the 1930s. During the Great Depression, crop prices crashed and nearly 30 million Americans who lived on the country’s 6.5 million farms and ranches were at risk of losing everything. To protect them and keep food production going, the US government stepped in. It started subsidising key crops, especially corn.

Then came World War II, and the government doubled down. Corn was crucial to the war effort, so farmers were encouraged to grow more. And even after the war ended, those subsidies didn’t stop. Demand dropped, but no one wanted to see farmers go broke overnight. So the government kept footing the bill to keep production up.

By the 1970s, US farm policy had shifted entirely. The new idea was to produce cheap corn at all costs even if it meant overproduction. Even if prices fell and even if it meant paying farmers to grow corn below cost.

And that simply made HFCS, made from all that surplus corn, incredibly cheap. So cheap, in fact, that food companies couldn’t resist. Coke jumped on the bandwagon too, tweaking its recipe to replace cane sugar with HFCS.

Around that time, in the mid-1980s, Coke even tried to rebrand the beverage by launching “New Coke” with the new formulation. People hated the taste, protested and forced the company to bring back the original version. But even that original version still had HFCS.

And it’s stayed that way ever since. In the US, Coke uses corn syrup. But in places like India and Mexico, it’s still sweetened with cane sugar simply because cane sugar is more accessible and affordable there.

Now, imagine reversing that shift in the US. Not so easy, right?

The US simply doesn’t produce enough cane sugar to meet the demand. To put that into perspective, Americans consume about 12.5 million tonnes of sugar every year. But the country produces just around 4 million tonnes of cane sugar. The rest comes from sugar beets and imports. And that could make switching from cheap HFCS to cane sugar expensive. For context, producing cane sugar can cost around $0.40 to $0.50 per pound, while corn syrup comes in at nearly half that.

And if Coke makes the switch, it could see its annual costs rise by $800–900 million. That could translate to a 10–15% hike in prices for consumers. And if consumer behaviour studies are anything to go by, people tend to cut back when prices rise, even if it’s just a few dollars. So ironically, if people start drinking less Coke because it becomes more expensive, Trump’s health mission might accidentally work.

The flip side though is that corn farmers could take a serious hit. Estimates say they might lose anywhere between $2 to $7 billion in farm income if companies like Coke ditch HFCS. Sure, it could benefit sugarcane farmers especially in places like Florida and Louisiana, who’ve been struggling for years due to low demand. But it might not balance out the 14,000–15,000 job cuts that could come from the corn processing and HFCS refining sectors.

So yeah, the bottom line is that the math just doesn’t add up because a sudden spike in demand for cane sugar would mean importing more from countries like Brazil, Mexico or even India. And that’s where things get tricky. There are quotas and restrictions in place and lifting them isn’t something that Trump would be up for now since his trade policies lean towards cutting down on imports, not increasing them. On the other hand, ramping up domestic cane sugar production overnight isn’t exactly doable either.

So, how exactly Trump plans to pull this shift to “natural” ingredients in processed foods is something we’ll just have to wait and see.

Until then…

P.S.: The US guzzles more Coca Cola than any other country — nearly 39 billion litres a year! That’s almost twice as much as the next biggest consumer, Mexico.

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