One of the massive perks of getting a burrito at Chipotle is that you can get a huge amount of delicious food for cheap. Well, you may have to shell out a little more to get your burrito fix in the future.
President Donald Trump has threatened to slap tariffs on Mexican goods and, if they go into effect, it’s going to impact the price of your Chipotle. Company CEO Jack Hartung said Monday that the tariffs would cost Chipotle $15 million this year and reduce its profit margins by 20 to 30 points.
“If the tariffs become permanent, we would look to offset these costs through other margin improvement efforts already underway,” Chipotle CFO Jack Hartung said in a statement, per Yahoo Finance. “We could also consider passing on these costs through a modest price increase, such as about a nickel on a burrito, which would cover the increased cost without impacting our strong value proposition.”
Trump said in a statement last week that he would put a five percent tariff on all Mexican goods if the country doesn’t address illegal immigration. He also plans to keep increasing the tariffs at a steep rate. It would go up to 10 percent on July 1 and will keep going up by 5 percent a month until Mexico acts, he said. By October, it could be as high as 25 percent.
“If Mexico fails to act, tariffs will remain at the high level, and companies located in Mexico may start moving back to the United States to make their products and goods,” Trump said in the statement.
Mexico is a huge source of agricultural imports to the U.S., which means more than Chipotle will be impacted. Prices at many restaurants and even grocery stores may start to go up.
For now, start hoarding your nickels. You might need them for your Chipotle burritos in a few days.
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