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Chipotle Commits to Absorbing Costs of New Trump Tariffs, For Now

The restaurant chain's CEO says prices will remain steady despite expected cost increases from tariffs on Mexico, Canada, and China.

A customer orders food at a San Francisco Chipotle restaurant in April 2022.
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Overview

  • Chipotle CEO Scott Boatwright stated that the company plans to absorb costs from President Trump's new tariffs without raising prices for customers in the short term.
  • The tariffs, set to take effect March 4, include a 25% levy on imports from Mexico and Canada, and an additional 10% on Chinese imports, compounding an earlier 10% tariff on Chinese goods implemented in February.
  • Boatwright estimated that the tariffs would increase Chipotle's cost of goods by about 0.6%, partly due to its reliance on Mexican avocados, which make up 50% of its supply.
  • The CEO emphasized that Chipotle's strong economic model allows it to manage inflationary pressures, though he acknowledged pricing could change if costs become a significant burden.
  • Trump's tariffs aim to hold trade partners accountable for drug trafficking and border security, but critics argue the costs will ultimately impact American consumers and businesses.