Coca-Cola says that it can manage the effects of tariffs, but that lower sales to Hispanic consumers dented its sales in the U.S. and other markets including Mexico.The beverage company posted a 3% volume drop in North America,

Coca-Cola Co. said that geopolitical tensions caused by US immigration and trade policies are partially to blame for Hispanic consumers spending less on the soda company’s beverages.

Coca-Cola's quarterly revenue and profit beat estimates on Tuesday thanks to price hikes and strong demand for its sodas, but the beverage giant warned U.S. tariffs could impact costs and hurt consumer sentiment going ahead.

Coca-Cola reported better-than-expected earnings in the first quarter and said the impact of tariffs on its business are likely to be “manageable.”

Some of the world’s largest companies like Coca-cola are in a predicament as they try to fully assess the impact of the US tariffs on their operations.