Trump-Mexico Spat: Chipotle Says Tariffs Could Cost Company $15 Million

U.S. President Donald Trump plans to slap new 5% tariffs on Mexican imports over illegal immigration, but American companies, such as the restaurant chain Chipotle (CMG), could be hurt in the feud.

Chipotle, a fast-casual restaurant serving its take on Mexican burritos and tacos, said that the tariffs could cost the company as much as $15 million if the tariffs were enacted.

"If the threatened tariffs are put in place, the company’s costs would rise $15 million this year, pinching its profit margin," Chipotle CFO Jack Hartung said in a statement Monday. He also mentioned that the cost of burritos could rise 5 cents in response to the tariffs.

Chipotle relies on Mexican imports, such as avocados, for its food items.

Trump believes the tariffs are a means to get the Mexican government to act on illegal immigration to the United States, with a 5% percent tariff slated for June 10. In regards to trade and immigration, Trump tweeted that Mexico is an "abuser" of the United States.

Trump's tariffs aren't the only issue that have affected the price of Chipotle's food items lately. Last month, African swine fever caused an analyst at BMO Capital Markets to downgrade Chipotle's stock due to possible rising pork prices, CNBC reported. Chipotle has said that it isn't worried about the virus affecting its business, as pork makes up less than 2% of Chipotle's total food costs.

Although Chipotle's take on Mexican cuisine is incredibly popular, as there are 2,500 branches across the U.S., the restaurant's image has taken a hit in recent years due to food safety concerns. In 2015, there were cases of Salmonella and E.Coli caused by the restaurant's food. On February 8, 2016 the stores shut down to have meetings on food safety.

This year, the chain has bounced back, with the company continuing to expand and stock jumping up 60% in May due to higher profit margins.