Trump Tariffs Hit Toyota Hardest Among Global Automakers

Toyota Motor Corp. is the world's largest automaker, but it is also the industry's biggest loser in terms of projected losses from US President Donald Trump's trade war.

Duties on imported cars and auto parts have forced General Motors Co. to cut its full-year profit forecast by up to $5 billion, while Ford Motor Co. expects a $1.5 billion annual hit. Toyota's profits drop by $1.2 billion in just two months. While the Japanese automaker did not provide a tally for all of 2025, it did project operating income of ¥3.8 trillion ($26.1 billion) for the fiscal year ending March 2026—far below the ¥4.7 trillion expected by analysts.

While Toyota has increased local production in the United States to more than half of total sales, the company still imports key vehicle parts and models, amounting to approximately 1.2 million vehicles per year. The White House took notice, with Trump mentioning the Toyota City-based automaker by name during his contentious Liberation Day speech in the Rose Garden on April 2. He complained about Toyota's "one million foreign-made automobiles" sold in the United States.

The massive tariff hit reflects the company's decision to maintain sticker prices at US dealers and production volumes at its 11 American factories as bilateral trade negotiations between the US and Japan begin. These talks began in February, and it is unclear when a deal will be reached.

"When it comes to tariffs, the details are still incredibly fluid," Toyota CEO Koji Sato said last week, following the release of the company's latest financial results. "It's difficult to take steps or measure the impact."

Ryosei Akazawa, Japan's chief trade negotiator, stated on April 30 that one unnamed Japanese automaker is currently losing around $1 million per hour due to tariffs, citing a calculation made by an unidentified corporate executive. On Friday, a Japanese government official declined to comment further. However, that loss rate is not far off from Toyota's projected $1.2 billion hit based on 730 hours per month. Akazawa has expressed hope that an agreement can be reached by June, with the next round of negotiations scheduled for late May.

Most imported vehicles became subject to a 25% US duty on April 3, and most auto parts became subject to that levy on May 3. There are some executive orders that prevent duties from being doubled, but given that the United States is the largest market for Japan's five largest automakers, even a moderate increase in tariffs will have a significant impact on their profits.

On May 8, the Trump administration reached its first trade deal with the United Kingdom. However, the US had a $11.9 billion goods trade surplus with the UK last year, compared to a $68.5 billion deficit with Japan. This may make it more difficult to reach an agreement without significant concessions from one party.

"The hurdle is high for Japan to get auto tariffs lowered" on exports to the United States, said Hiroshi Namioka, chief strategist at T&D Asset Management Co. "At the same time, the auto industry is too important for Japan to simply go along with what the US wants."

Some Japanese automakers have restructured their global manufacturing footprints in response to the challenging new trade environment. Nissan Motor Co. has halted US orders for SUVs built in Mexico, and Honda Motor Co. is shifting production of its Civic hybrid from Japan to the United States. 

Mazda Motor Co. is suspending exports to Canada of one model manufactured at an Alabama factory that is a joint venture with Toyota in response to retaliatory tariffs against the United States.

"We will maintain our current operations while continuing to focus on lowering fixed costs, all while keeping a close eye on US authorities' movements, including customs duties," a Toyota spokesperson said in a statement.