EnAcross-the-board tariffs proposed by the Trump administration on Mexican exports could rapidly have a knock-on effect to consumer products. Chipotle CFO Jack Hartung has stated that the proposed tariffs, detailed in Panjiva’s research of May 31, could add $15 million per year to the companies costs, according to CNBC.
Hartung also stated that if sustained the firm would look to cut costs of “consider passing on these costs through a modest price increase” as well as working with suppliers to reduce input prices.
While the incremental cost for Chipotle could be modest, the impact across the food preparation is more significantly. Panjiva data shows U.S. imports of 13 foodstuffs used in preparation of Mexican fast food were worth $7.05 billion in 2018, representing 43.1% of U.S. imports of those products.
Source: Panjiva
On a proportional basis the most exposed product is avocados with imports from Mexico worth $2.07 billion representing 88.2% of U.S. imports. Similarly for tomatoes imports worth $2.06 billion represented 86.2% of U.S. imports while for peppers imports worth $1.09 billion were equivalent to 73.3% of the total. The largest individual import line is beef, though Mexico only accounted for 20.9% of U.S. imports.
Source: Panjiva
Chipotle’s comments suggest that exporters from Mexico may come under pressure to cut prices should tariffs remain in place. The largest shipper of the 13 foodstuffs covered in this analysis was meat-focussed Grupo Viz with imports worth $712 million in the 12 months to Apr. 30. Among the vegetable shippers the largest was Mastronadi with $221 million shipped followed by NS Brands at $213 million and Dole Foods with $86 million.
Source: Panjiva
