Toyota warns of £7.1bn hit from Trump tariffs as it cuts profit forecast
The biggest carmaker in the world said it expected to make an operating profit of 3.2tn yen in its financial year to March 2026, down 16% on previous guidance of 3.8tn yen.
The anticipated annual hit from US tariffs includes the impact of the levies on car imports, higher material prices and a stronger yen.
The figures were reported as the latest wave of country-specific tariffs came into force, with dozens of countries facing higher taxes on their exports to the US, including Japan whose baseline rate rose from 10% to 15% under the terms of a framework agreed between Tokyo and Washington last month.
Under the deal, Japanese automotive exports to the US are to face a 15% tariff, down from previous sector-specific levies that added up to 27.5%. The timeframe for when the change comes into effect has yet to be announced.
Toyota's operating profit fell by almost 11% to 1.17tn yen in the three months to he end of June compared with the same period last year.
Its figures came a day after rival Japanese carmaker Honda reported a 50% drop in profit in the same quarter to 244bn yen. That was mainly because of a 124bn yen hit from US tariffs, the company said.
The global car industry has been one of the hardest hit by Trump's trade wars. The sector accounts for 8% of jobs in Japan, with vehicles and automotive parts making up more than a quarter of all the countries exports to the US.
As part of last month's bilateral deal, Trump said Japan would invest $550bn (£410bn) in the US. The president also claimed that Japan would open its market to US products such as cars, trucks, rice and certain agricultural products.
Despite the trade turmoil, Toyota reported record sales in the first half of the year, up 5.5% to 5.1m vehicles, supported by demand for hybrid cars. Shares in the company, however, have dropped by more than 10% this year over tariff uncertainty.
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Trump's latest wave of country-specific tariffs that came into force on Thursday include rates of more than 40% on imports from Syria, Laos and Myanmar, down to 15% for the EU and 10% for the UK.
The 'reciprocal' levies announced by the White House a week ago – before a previous 1 August deadline was due to elapse – came into effect a minute past midnight Washington time on Thursday.
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