President Donald Trump promised to impose tariffs of 25% on auto imports to the U.S., a move that could have sweeping repercussions for Japanese auto stocks such as Honda (HMC), Toyota (TM) and Nissan (NSANY) among others.
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Trump said Tuesday that he would likely announce the tariffs as early as April 2nd, alongside similar tariffs on pharmaceutical and chip imports, though it’s unclear at this stage how the plans would affect the postponed tariffs on Mexico and Canada.
“I probably will tell you that on April 2nd, but it’ll be in the neighborhood of 25%,” Trump told reporters at his Mar-a-Lago base in Florida when asked about his thoughts on auto tariffs.
The news on tariffs comes as data on Tuesday shows Japan’s exports rose for a fourth straight month in January, led by auto shipments to the United States.
Japan Auto Stocks Exposed
TM sold 2.33 million units in the U.S. last year, almost a quarter of its global sales of 10.15 million vehicles. Something like 530,000 of these were direct imports from Japan.
Honda would face a hit of approximately ¥700 billion ($4.6 billion) annually in the event of a trade war, according to the Japan Times. And a new 25% tariff would represent a third of Toyota’s Fiscal 2025 profit guidance and nearly half of Honda’s, according to Bloomberg Intelligence.
Nissan exports some 320,000 vehicles annually from Mexico to the U.S. Nissan CEO Makoto Uchida suggested earlier this week that the company could shift production from Mexico to the U.S. in the event of higher tariffs.
“We are exporting a large volume to U.S., so if there’s a high tariff, this will have huge implications on our business, so we need to monitor this carefully,” Uchida said when asked about Trump’s tariffs plans, according to a Reuters translation.
In Tokyo on Wednesday shares of Nissan (JP:7201), Toyota (JP:7203) and Honda (JP:7267) all declined.
Trump’s Tariff Escalation
Trump initially imposed a 25% tariff on imports from Canada and Mexico, sending shares of Ford (F) and General Motors (GM) lower, but later agreed to a delay after both countries announced additional actions to secure their borders. Here’s a look at the auto stocks most exposed to tariffs. A 10% tariff on all imports from China was imposed, affecting numerous Chinese EV stocks like BYD (BYDDF), while he also announced a 25% tariff for steel and aluminum imports.
Following this, Trump called for an investigation of other nations’ tariff and tax policies in search of a more “balanced” trading relationship. He said this could result in new reciprocal tariffs taking effect as soon as April 2nd, the day after the investigation is set to conclude.
Yesterday, speaking from his Mar-a-Lago club in Florida, Trump seemed to pre-empt some of the investigation by suggesting autos, chips and pharmaceuticals would face 25% tariffs at least.
Meanwhile, shares of Volkswagen (VWAGY), one of the biggest auto importers to the U.S., fell in Frankfurt (DE:VOW) on Tuesday morning.
What Auto Stocks are Affected by Trump’s Tariffs?
You can compare the different auto stocks affected by Trump’s tariffs using the TipRanks Stocks Comparison Tool.
