Toyota Warns of $1.2 Billion Profit Hit from U.S. Tariffs in Just Two Months
- Edition Sona Times
- May 8
- 1 min read
Toyota Motor Corporation has announced that the recent U.S. tariffs imposed under President Donald Trump’s administration are projected to cost the company approximately $1.2 billion in profits over April and May alone. This significant financial impact underscores the challenges faced by global automakers amid escalating trade tensions.
The 25% tariffs on imported vehicles and parts have disrupted Toyota’s operations, particularly affecting models exported from Japan to the U.S., which constitute about 26% of Toyota’s American sales. The company has reported that these tariffs could reduce its operating profit by 21% for the fiscal year ending March 2026, bringing it down to an estimated ¥3.8 trillion ($26 billion) from ¥4.8 trillion the previous year.
Despite strong global demand for its hybrid vehicles, Toyota is grappling with additional challenges, including a stronger yen and rising raw material costs. The company is also considering strategic adjustments, such as shifting production to the U.S. or other regions, to mitigate the impact of ongoing tariffs.
Toyota’s situation reflects broader concerns within Japan’s automotive industry, which heavily relies on the U.S. market. Analysts estimate that the new tariffs could cost Japanese automakers up to $25 billion annually, with Toyota bearing a significant portion of this burden.
As trade negotiations continue, Toyota and other automakers are closely monitoring developments, hoping for resolutions that will alleviate the financial strains imposed by the current tariff landscape.
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