Chipotle says prices could go up if U.S. makes good on Mexico tariffs threat
WASHINGTON (KTVU, AP) - The cost of a Chipotle burrito could cost you more if President Donald Trump goes through with his threat to slap Mexico with tariffs as part of a dispute over illegal immigration.
The company's chief financial officer on Monday said the tariffs could add $15 million to its costs in 2019.
CFO Jack Hartung said the tariffs would reduce profit margins for the restaurant chain, which sells burritos and tacos and said it uses 450,000 avocados a day. Chipotle said it imports much of the produce it uses from Mexico and other countries.
The company is projecting it would have to raise burrito prices by around 5 cents to cover the losses.
During a news conference in London, President Trump said he expects to begin hitting Mexico with tariffs next week.
While he said he thinks Mexico will take steps to halt the migrant flow, he went on to threaten that if that doesn't happen, his administration is "going to put tariffs on." Last week, the president said he's set to impose a monthly 5% tariff on Mexican imports, rising to a total of 25% by October.
Economic experts said the president's plan may not hurt Mexico as much as it would affect poor Americans, who already live close to the financial edge and could have to pay more for everyday purchases.
Jay Shambaugh of the Brookings Institution said that tariffs are a tax on consumption for many low-income households.
Meanwhile, Mexico said it sees a good chance of avoiding the proposed tariff, with an agreement likely Wednesday. But despite its optimism, Mexico also noted that it will be ready, if an agreement is not reached.
The Associated Press contributed to this story, which was reported from Oakland, Calif.