Monday, June 3, 2019

Chipotle Says Mexican Tariffs Could Result in Price Hikes

Chipotle Mexican Grill said its 2019 costs could rise by about $15 million this year if President Donald Trump’s proposed tariffs on Mexican imports are enacted, and that price increases could also occur for its meals.


“If the tariffs become permanent, we would look to offset these costs through other margin improvement efforts already underway,” CFO Jack Hartung said in a statement. “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.”

Chipotle estimated the tariffs could reduce 2019 margins by 20 to 30 basis points.

In my video, The Ugly Truth About Tariffs, I explain how tariffs can hurt across the economic spectrum from manufacturers to consumers. It is not a one-stop bite in the economy. This is why Chipotle can report that they will increase prices but also suffer a reduction in profit margins. No one in mainstream media is reporting the tariff impact properly. Most report as though the increases will completely be reflected in price increases, while others go with Trump and report as though it will be completely absorbed by manufacturers. It is much more complex than that.

-RW

11 comments:

  1. A small price to pay to stem the tide of invaders that offer nothing to this country. Trump can't get Congress to act, so this a good alternative for now. I'm doubtful it would be permanent.

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    1. Tyrants and their enablers always allude to this idea of a "small price" people should pay (not may) for some lofty result, with no regard to the underlying subjective nature of that price or whether the enablers are hit by it. As an example of this disconnect, I can bring up anti-human enviro-terrorists who never consider themselves part of that Population that should be culled. You present the same kind of arrogance.

      People who come to this country always have something to offer in terms of labor and efforts. Even you have recognized this reality before, whenever you disparage immigrants for their "cheap" labor, notwithstanding that you're today contradicting yourself. Cheap labor is something to offer that is positive, unless you prefer expensive labor.

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    2. Your arguments Old would be more compelling if the administration wasnt actively making all but the top 10% as poor and beholden to the government as a first time immigrant.

      With this race to the bottom, mass immigration is nothing other than a poverty invasion aimed to break spirit of a country. With this in mind your hopeful banter carries no weight. Sorry!

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    3. Hello, Shegottawideload,

      You present a point that has no relationship with what Lab Manager is claiming and what I am arguing. The United States is not unique in its use of monetary manipulation to extract value from people's labor in a surreptitious manner. Taken to its logical conclusion, there would be no point in pursuing any action because the State exists. I don't believe you live your life like tgst and so I cannot take your response seriously.

      Regarding this idea that we're "invaded" by poor people whomare just gojng to make the rest poorer (hence this race to the bottom you allude to), what you present is a good example of "the pie is but one size only" mentality which permeates the thinking of the envious and the jealous, both on the right and the left of the Authoritarian spectrum, based on that same fallacy. There's no such race to the bottom, and the pie is grown bigger through the thing most Trumpists seem to hate lately: capitalism, and markets.

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    4. Lab Manager is just a dumb chump falling for a stupid trick because he's scared of melanin. Its hilarious.

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    5. Hello, Doxon,

      If you find amusement in reading Lab Manager's paranoid musings, you should hear what Fox News' schlock jock Tucker Carlson said about naturalized citizens of Mexican origin: that their voting patterns represent true voting interference coming from a foreign country. Because... they're Mexicans. Who are now American Citizens. And they all conspired to, I guess, migrate legally and take over the US.

      https://www.sfgate.com/news/article/Tucker-Carlson-says-Mexico-has-interfered-with-US-13081426.php

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  2. The link to your video about tariffs is not currently working for me. Error 404 not found.

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    1. Okay. I think it is an accurate video, from a purely economic standpoint. But I think there is a case to be made for certain tariffs to exist (such as steel) which the military relies on and would be critical in a time of war. So like steel for instance. If the US relies on China for all its steel and then China declares war on the US (God forbid), then it would be really bad.
      Unfortunately we dont live in a world where the posibility of war doesn't exist. The risk of war has to be taken into consideration.

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