Toyota, the world’s biggest carmaker, has warned that it will face a 1.4 trillion yen (£7.1 billion) hit from US trade tariffs. The Japanese company reported a drop in net profit and cut its guidance for next year due to the impact of the tariffs on car imports, higher material prices, and a stronger yen.
The tariffs, which came into force last week, include a 15% rate on Japanese automotive exports to the US, down from previous sector-specific levies that added up to 27.5%. Toyota’s operating profit fell by almost 11% in the three months to June compared with the same period last year.
The global car industry has been severely affected by Trump’s trade wars, which account for 8% of Japan’s jobs. The sector is also a significant contributor to Japan’s exports, with vehicles and automotive parts making up more than a quarter of all exports to the US.
Despite the uncertainty, Toyota reported record sales in the first half of the year, driven by demand for hybrid cars. However, shares in the company have dropped by over 10% this year due to tariff uncertainty.
The latest wave of tariffs includes rates of over 40% on imports from Syria, Laos, and Myanmar, down to 15% for the EU and 10% for the UK. The move comes as part of Trump’s efforts to address trade imbalances with countries such as Japan.
Source: https://www.theguardian.com/business/2025/aug/07/toyota-cuts-profit-forecast-trump-tariffs