Toyota Cuts Profit Forecast By 16% Due To US Tariffs
Toyota has just reported a USD10 billion profit hit from recent US tariffs in its fiscal first quarter, prompting a 16% cut to its full-year profit forecast and raising industry-wide alarm over the mounting cost of trade restrictions.
This huge loss marks the largest tariff-related quarterly hit by any auto manufacturer to date.
In its April to June 2025 results, Toyota said net income fell nearly 40%, while operating income dropped 11% to USD7.9 billion. The company attributed the losses directly to US tariff measures affecting imports from Japan, despite an announced bilateral trade deal.
Toyota warned total tariff costs for the fiscal year could reach USD9.5 to 10 billion but will not raise US vehicle prices, opting instead to absorb the impact to protect market share. “We continue to prioritise our US operations and customer base,” a spokesperson said.
The Japan-US trade deal announced earlier this year proposed cutting automotive tariffs from nearly 30% to 15%, but with no set implementation date, uncertainty persists. “It is still not clear to us when the change will take effect,” said Nissan CEO Ivan Espinosa.
Industry-wide, automakers have already faced nearly USD12 billion in cumulative tariff costs, according to the Wall Street Journal. Companies are responding with price hikes, supply chain shifts, and accelerated US investment, though each carries its own risks.
Despite the headwinds, Toyota’s US sales remain strong, with global deliveries up 6% and electrified vehicle sales rising 17%. The company continues to expand its US manufacturing footprint to cushion the impact of trade policy uncertainty.
The White House has said the deal will be reviewed every 90 days, leaving auto manufacturers braced for prolonged volatility, especially smaller Japanese suppliers with less room to absorb costs.
Toyota acknowledged its current strategy may not be sustainable if tariffs persist. “It is honestly very difficult for us to predict the market environment,” said CFO Takanori Azuma, reaffirming Toyota’s commitment to its US customers.
For the full year, Toyota expects the USD9.5 billion hit to include both its own costs and supplier losses, particularly among US-based firms importing parts from Japan.
Meanwhile, competitors project smaller impacts since their volumes are smaller. GM is seeing USD4 to 5 billion, Ford USD3 billion, and Stellantis USD1.7 billion in additional tariff-related expenses. Some others are just pausing exports to US until further notice.
