If the proposal President Trump has been suggesting to institute tariffs on Mexican goods to pay for his border wall really comes to pass, we are definitely going to notice it here in L.A. In addition to the numerous implications of a wall for our culture and the large number of immigrants from Mexico and Latin American who live in Los Angeles, the tariff would increase the cost of some of our favorite foods.
It can be hard to think of what a 20 percent hike really means for you as a consumer. So, to bring it home, we decided to look at it through an example of something near and dear to our hearts: guacamole. Specifically, one of our favorite guacamoles in Los Angeles, the Guacamole en Molacjete that they mash up at Rosa Mexicano at L.A. Live, a dish currently on the menu for $14.50.
Even though some avocados are certainly grown here in California, the majority of what makes it to our tables on a commercial scale actually come in from Mexico. For a Mexican-grown, non-organic-certified Hass avocado, the average sale price in 2016 was $1 per fruit, according to the retail volume and pricing data complied by the Hass Avocado Board. The official recipe for Rosa Mexicano’s guac calls for three Hass avocados per bowl. If three avocados cost $3 today, once you add the cost of the tariff, that key ingredient is suddenly $3.60.
While we assume not all the produce in Rosa Mexicano’s guacamole comes from Mexico, for the sake of this case study, let’s imagine they do. Given that, it's logical to think the current total cost of their guacamole would increase 20 percent, making it $17.40. And it's not just the ingredients that could make the cost go up.
Let’s take a look at just a few of the other things at play here. Those cool molcajete mortar and pestles they use for their famous tableside service? Getting a traditional lava stone one, similar to what Rosa Mexicano uses, currently costs $44.95 at MexGrocer.com, before tax or shipping costs. That means that, with a 20 percent tariff, it would cost at least $8.99 more for them to get that on your table. Similar increases would apply to things like any decorations around the restaurant, maybe the glass for the margarita you’re drinking while you eat the guacamole, and so on.
Which brings us to a big unknown: How the tariff, wall, deportation or other policies would impact the cost of labor in the local hospitality sector. The food industry is the largest employer in the United States and many people working in L.A. kitchens are immigrants, sometimes undocumented. Will we see labor costs go up if undocumented residents are deported? Will L.A. or California add new service charges or taxes to compensate for the federal funding the new administration is threatening to cut off? As Eater reported, there are several possible scenarios for how that could change in coming years, but we will have to wait and see.
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