Chipotle says Mexico tariffs could cause prices to rise
Restaurant chain Chipotle Mexican Grill says the Trump administration’s threatened tariffs on Mexican products could add $15 million to its costs in 2019.
Chipotle Chief Financial Officer Jack Hartung said Monday the tariffs would reduce profit margins for the fast food company, which sells burritos and tacos and claims to use 450,000 avocados per day.
Under the Trump administration’s plan, tariffs would start at 5% on June 10 and rise to 25% in October. President Donald Trump says he will impose the tariffs as a way to force the Mexican government to block mostly Central American migrants from crossing into the U.S.
Hartung says if the tariffs become permanent Chipotle would offset them through cost-cutting efforts or modest price increases, such as a nickel per burrito.
Chipotle uses avocados and other produce grown in Mexico. The chain operates 2,500 restaurants in the U.S., Canada and Europe.