Shares in the world’s biggest carmaker Toyota (TM) reversed today after it warned it would take a huge $9.5 billion hit from President Trump’s tariffs.
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Toyota Turmoil
Japanese group Toyota said that it expected Trump’s auto tariffs to reduce its operating income for the 2026 fiscal year by 1.4 trillion Japanese yen, or $9.5 billion. That’s 1.2 trillion Japanese yen higher than what it had initially forecast.
It said the tariff hit would come in the form of higher levies, the increased price of materials and a stronger yen.
It expects to make an operating profit of 3.2 trillion yen in its financial year to March 2026, down 16% on previous guidance of 3.8 trillion yen.
“Due to the impact of U.S. tariffs and other factors, actual results showed decreased operating income, and the forecast has been revised downward,” Toyota said in its first-quarter results summary.
Trade Deal
This is despite the recent trade deal between Japan and the U.S., which lowered the tariff on Japanese auto imports to the U.S. market from 25% to 15%.
Japanese rival Honda (HMC) reported a 50% fall in year-over-year operating profits earlier this week. It said that the tariffs had cost it around 122 billion Japanese yen in lost profits in the past three months, and warned the total hit this year could be as much as 450 billion Japanese yen.
Honda executives, however, said the impact of the tariffs would be less severe than initially expected, and the company raised its full-year operating profit forecast by 40%.
The threat of tariffs has weighed on Toyota’s share price this year, dropping over 5%.

To try and tackle the tariff threat both Toyota and Honda have looked to up their production numbers in the U.S. Earlier this year, Toyota said it was considering producing the next version of its popular RAV4 SUV in the U.S., while Honda is shifting production of its next-generation Civic hybrid stateside.
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