Chipotle to Absorb Costs of Trump’s Planned Tariffs Until They Become a Challenge
President Trump’s Tariffs and Their Impact on Chipotle
Chipotle CEO, Scott Boatwright, recently shared insights on how his company plans to respond to the planned tariffs by President Donald Trump. For now, the company plans to absorb the costs, unless they become a significant burden.
In an interview with NBC Nightly News, Boatwright said that if the tariffs pose a “significant headwind”, the company’s stance may change. He also disclosed that Chipotle sources 2% of its ingredients from Mexico, and less than 0.5% from Canada and China.
Upcoming tariffs could have an ongoing impact on Chipotle’s cost of sales, according to Boatwright.
Details on Trump’s Tariff Plans
Trump signaled that the U.S. is set to impose a 25% tariff on imports from Mexico and Canada and an additional 10% levy on Chinese imports. Already, a 10% tariff on Chinese imports was implemented earlier this year. These were temporarily suspended in January for a month after Canada agreed to a $1.3-billion border plan, and Mexico promised to provide 10,000 troops on the U.S.-Mexico border.
Existing and Projected Impact of Tariffs
Trump has already increased tariffs on goods imported from China by 10% across-the-board. The Chinese government responded with retaliatory tariffs on certain U.S. energy exports and took other punitive measures, including an antitrust probe of Google and restrictions on exports of rare earth minerals.
Following Trump’s re-election, the White House stated that he is working “to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.”
Facing Opposition
Some critics argue that the cost of the tariffs would be passed on to American consumers. Over the past few months, several retailers have expressed concerns about tariffs driving up the costs of their products or even forcing them to cut back on inventory.
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