Toyota on Thursday released a report projecting that President Trump’s sweeping tariffs, including automobile import taxes, would result in a $1.3 billion drop in profits for April and May.
Trump earlier this year proposed a 25 percent tariff on foreign vehicles and car parts. Toyota, a Japanese-owned company, would be subject to the additional tax — likely resulting in a trim to the manufacturer’s earnings, per a financial summary.
The expected loss would result in a 20.8 percent decrease in operating income after expenses are deducted, the company predicted. This comes after a year of record profit for the manufacturer, which touted the highest annual profit ever recorded by a Japanese auto firm in 2024.
Toyota raked in over 32.4 billion last year — a 96.4 percent surge from the previous period. The unprecedented growth is now bogged by Trump’s tariffs, which the president has signaled could be tweaked through trade negotiations. The Trump administration has already paused retaliatory import taxes on most foreign trading partners — with the exception of China — leaving the door open for talks.
At the end of April, the U.S. said it would spare foreign auto parts from facing a double hit from the president’s car tariffs and duties levied on foreign metals — such as steel and aluminum — by instead charging the highest available rate per product.
Automakers, per the White House, will be permitted to apply for a 15 percent price offset during the first year under the tariffs, and a 10 percent offset in the second year. Trump’s goal has been to draw companies to produce domestically in the U.S.
The president’s decision was made just a day before Ryosei Akazawa, Japan’s chief trade negotiator, met with officials in Washington.
Akazawa told reporters that top auto executives said they were “losing $1 million an hour” due to the new tariffs.
“While national interests are nonnegotiable, we must act cautiously yet urgently, as our companies are suffering losses every day,” Ryosei Akazawa, Japan’s chief trade negotiator said in late April, according to The Japan Times.
Japanese automakers Nissan and Honda are set to release fiscal year earnings next week.