The recent 25% tariff on Mexican imports is expected to increase the cost of key taco ingredients, notably avocados and tomatoes. Given that Mexico supplies over 90% of avocados and a significant portion of tomatoes consumed in the U.S., these tariffs will likely lead to higher prices for these products.
Estimated Impact on Taco Prices:
• Avocados: A 25% tariff could increase avocado prices by approximately 15%.
• Tomatoes: Similar price hikes are anticipated for tomatoes due to their reliance on Mexican imports.
Example Calculation:
• Avocado Cost: If a taco typically contains $0.50 worth of avocado, a 15% increase adds about $0.075 per taco.
• Tomato Cost: Assuming $0.30 worth of tomato per taco, a 15% increase adds approximately $0.045 per taco.
Total Increase: Approximately $0.12 per taco.
Considerations:
• Restaurant Pricing Strategies: Some establishments, like Chipotle, have pledged to absorb these costs to keep prices stable, though this may change if tariffs persist.
• Alternative Sourcing: Restaurants may seek other suppliers or adjust ingredient quantities to mitigate costs.
In summary, while the tariffs are expected to increase ingredient costs, the exact impact on taco prices will vary based on individual restaurant decisions and sourcing strategies.
