Tariff turbulence Toyota and Honda are bracing for significant profit declines as U.S. tariffs on Japanese goods take effect. The new duties part of President Trump’s broader trade overhaul target vehicles and components, raising export costs sharply.
Currency crunches The Japanese yen’s recent strength compounds the pressure. A stronger yen makes exports more expensive and erodes overseas earnings when converted back to yen. This double whammy is hitting automakers’ bottom lines hard.
Market reaction:
Toyota revised its FY2025 profit forecast downward by 12%, citing tariff and currency headwinds.
Honda expects a 9% dip, with U.S. sales volumes also under strain due to price hikes.
Both companies are accelerating local production in North America to sidestep tariffs. Toyota is expanding its Kentucky plant, while Honda is boosting output in Ohio and Mexico.
Industry outlook:
Analysts warn that prolonged trade tensions and currency volatility could reshape global supply chains. Japanese firms may need to rethink export-heavy models and invest more in regional resilience.
(source reuters.com)
—Agencies
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