Toyota warns of $9.5-billion U.S. tariff hit, slashes annual profit forecast
The world's top-selling car maker also cut by 16 per cent its forecast for full-year operating profit, reflecting challenges for global manufacturers grappling with rising costs from U.S. levies on cars, parts, steel and aluminum.
'It's honestly very difficult for us to predict what will happen regarding the market environment,' Takanori Azuma, Toyota's head of finance, told a briefing, vowing to keep making cars for U.S. customers, regardless of tariff impact.
Azuma said the 1.4 trillion yen (US$9.50-billion) estimate also includes fallout suppliers are facing, particularly those in the U.S. importing parts from Japan, though he declined to say how much of the total was attributable to that.
Rivals have reported smaller tariff hits so far: GM has projected one of US$4- to US$5-billion for the year, while Ford expects a $3-billion hit to full-year gross revenues.
Global auto leaders say U.S. trade deals not good for industry
Jeep maker Stellantis said tariffs were expected to add US$1.7-billion in expenses for the year.
Toyota cut its operating profit forecast for the financial year to end-March 2026 to 3.2 trillion yen (US$21.7-billion), down from a previous outlook of 3.8 trillion yen.
It had previously estimated a tariff hit of 180 billion yen for April and May, but that was solely for the impact from tariffs on Toyota's vehicles. It had not issued a full-year projection until now.
For the first quarter from April to June, Toyota reported an operating profit of 1.17 trillion yen, down from 1.31 trillion a year earlier, but above the 902 billion average of seven analyst estimates compiled by LSEG.
Toyota's North American business swung to an operating loss of 63.6 billion yen in the first quarter, from profit of 100.7 billion a year earlier, as it took a hit of 450 billion from the tariffs.
Its broad production operations, which include U.S., Canadian, Mexican and Japanese plants, expose it to tariffs not only on direct exports but also on vehicles and parts shipped across borders within North America.
Honda sees 50% operating profit drop with stronger yen and U.S. tariff impacts, raises full-year forecast
Last week, the automaker said it turned out some 1.1 million Toyota and Lexus brand vehicles in North America in the first six months of 2025, including more than 700,000 in the United States.
The first-quarter results highlight the pressure U.S. import tariffs are putting on Japanese automakers, even as a trade pact between Tokyo and Washington offers potential relief.
Under the deal agreed last month, Japanese auto exports into the United States would face a 15 per cent tariff, down from levies totalling 27.5 per cent previously. But a timeframe for the change has yet to be unveiled.
Last week, Toyota reported record global output and sales for the year's first half, driven by strong demand in North America, Japan and China, including that for petrol-electric hybrid vehicles.
Toyota also announced on Thursday a plan to build a new vehicle factory in Japan, where car sales have been falling due to a shrinking population and declining ownership.
Toyota said it planned to start operations early next decade at the new plant, but has yet to decide production models.
The company's shares ended down 1.5 per cent after the earnings release.
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CBC
3 hours ago
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Sour news for pickle lovers: Bick's pickles no longer stocked at some Canadian retailers
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After the U.S. slapped tariffs on Canadian goods in March, the Canadian government retaliated with a long list of counter tariffs, among them a 25 per cent tariff on "cucumbers and gherkins." "I think a lot of retailers feel that 25 per cent tariff makes them just too expensive frankly," Oakland said, adding that retailers started reaching out to him with cost concerns at the start of the trade war. "The food business is a low-margin, high-volume business. And so there isn't 25 per cent either on the retailer side or the manufacturing side. So that has, in some cases, really inhibited the retailers' availability to justify carrying them." Oakland estimates that Bick's is still available in 70 per cent of the Canadian retail environment but said the company has been doing outreach to try and change the Canadian counter tariff, including reaching out to the governor of Illinois. 'An intertwined business' Bick's began as a Canadian company, was later acquired by a U.S. company and production was moved south of the border around 2014, Oakland said. However, the ties between the two countries have stayed strong. "We continued to prioritize Canadian cucumbers for that product. [It's] why we went to a Canadian lid supplier… It's just been an intertwined business and now we've got a border dispute that just makes that transfer back and forth across the border expensive," he said. While the pickles are assembled in Green Bay, Wis., Oakland said the company buys 11 million pounds of Ontario cucumbers every year and said all the lids on the jars come from an Ontario manufacturer. Now, the company finds itself in an awkward situation or — some might even say — a pickle. Sales are down about 25 per cent in the last three months, according to Oakland, who said, going forward, the company will buy fewer pickles and lids from its Canadian partners. Buy Canadian sentiment With patriotism surging amid trade tensions, many shoppers are opting to buy Canadian, but there could also be unintended consequences for a company such as Bick's, according to experts. "If buy Canadian means that people aren't buying Bick's, as an example, then Bick's is buying fewer cucumbers from Canadian producers. Then that buy Canadian is sort of coming back to bite, pardon the pun, the Canadian farmers," said food economist Mike von Massow from the University of Guelph. Kwaku Afesorgbor, a professor in the department of food, agriculture and resource economics at the University of Guelph, suggests it is ultimately customers who pay the cost. Afesorgbor said customers often end up absorbing the cost of tariffs or, if the product is no longer available, they face fewer options for what they can buy, which eventually affects their pocketbook. 'It's not great' Crystal Porcher wouldn't be offended if you called her a pickle enthusiast. The Edmonton woman grew up eating pickles and admits to eating the crunchy snack at least twice a week. She even has a pickle tattoo on her hands, one of 10 of her favourite food items. "If you're out in a pub or having a beer or whatever, they're usually on the menu and I am guilty of just asking for a bowl of pickles, even if it's just a side with something else," Porcher said. With several brands in the fridge at any given time, Porcher is still processing that pickles have been caught up in the trade war. "Personally, it's not great. Obviously I'm gonna be paying more for something that I love to eat. I'm not going to stop consuming an entire part of my diet because the prices increase a little bit. Obviously if I can't find them, I'll have to suss out some other options," she said. Food products caught in trade war The issue with Bick's spotlights how food products have been tangled up in the tariff dispute. "There are other products that have somewhat complicated supply chains, and I suppose pickled vegetables are an example of that," said John Cox, executive vice president of Pickle Packers International, a trade association of the pickled vegetable industry. Cox said the organization is advocating for duty-free transportation north and south of food products under the Canada-United States-Mexico Agreement (CUSMA). He argues that it is particularly important for the pickled vegetable industry, which he said is competitive with slim margins. "When you have a 25 per cent import duty added to the cost of production, it makes it impossible to be profitable," he said. "I'm concerned for the long-term prospects for Bick's." For Oakland and TreeHouse Foods Inc., the timing couldn't be worse. "Having lived in Ontario myself for 11 years, I understand how important barbecue season is and I just hate that Bick's is embroiled in this right now," Oakland said.
