What's happened
Toyota forecasts a 1.4 trillion yen ($9.5bn) hit from US tariffs, revising down its profit outlook for 2026. Other automakers like Honda, Mercedes, and Porsche report significant profit declines due to tariffs, supply chain disruptions, and declining demand, amid ongoing trade tensions and tariff negotiations.
What's behind the headline?
The current wave of tariffs is fundamentally reshaping the global auto industry. Toyota's forecasted 1.4 trillion yen loss underscores the severity of US trade policies, which have led to significant profit declines across major automakers. The industry is caught in a cycle of rising costs and supply chain disruptions, with companies like Honda and Porsche experiencing steep profit drops. The trade deal between Japan and the US offers some relief, but the lack of a clear timeline means uncertainty persists. Automakers are forced to raise prices, cut production, and limit exports, which could slow global sales growth and accelerate industry consolidation. The broader economic impact includes increased consumer costs and potential shifts in market share, favoring manufacturers with more flexible supply chains or local production. The next few months will determine whether trade negotiations lead to sustained tariff reductions or if ongoing tensions will deepen industry struggles.
What the papers say
Al Jazeera reports Toyota's revised profit forecast and the impact of tariffs on its North American operations, highlighting a 16% profit reduction and a 450 billion yen tariff hit. Business Insider UK emphasizes the $9.5 billion forecasted loss from US tariffs, noting the impact on Honda and other Japanese automakers, and discusses the trade deal lowering tariffs from 27.5% to 15%. The Guardian provides context on the broader industry impact, including profit warnings from Mercedes and Porsche, and details Aston Martin's strategic response to tariff deadlines. These sources collectively illustrate the widespread financial strain caused by US trade policies, with automakers adjusting strategies amid ongoing negotiations and tariff uncertainties.
How we got here
The US imposed tariffs on imported vehicles and parts, prompting automakers to adjust production, pricing, and supply chains. A recent trade deal between Japan and the US lowered tariffs from 27.5% to 15%, but the timeframe for implementation remains uncertain. The broader context involves ongoing trade tensions affecting global auto sales and profitability.
Go deeper
Common question
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Why Are Major Companies Like Mercedes and P&G Reporting Profit Drops?
Many of the world's biggest companies are seeing their profits shrink right now. This is mainly due to tariffs and geopolitical tensions disrupting supply chains and increasing costs. But what does this mean for the future of these companies? Are they going to recover, or is this just the start of a longer downturn? Below, we explore the key reasons behind these profit drops and what might lie ahead for global businesses.
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How Are US Tariffs Affecting the Global Economy and Companies?
US tariffs introduced in 2025 are reshaping international trade, impacting countries and companies worldwide. From rising consumer prices to corporate restructuring, many are asking how these policies will influence the global economy long-term. Below, we explore the key questions about the US tariffs, their effects on different nations, and what it means for consumers and businesses alike.
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Why Are Major Car and Consumer Goods Profits Falling in 2025?
Recent reports reveal a significant drop in profits for leading companies like Honda, Mercedes, P&G, and Porsche. This decline is largely driven by US tariffs and ongoing trade tensions, impacting industries worldwide. Curious about what’s causing these losses, whether companies expect a comeback, and what it means for consumers? Keep reading to find out the key factors behind this economic shift and how it might affect your wallet in 2025.
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How Are US Tariffs Affecting Global Car Makers?
US tariffs on imported vehicles and parts are reshaping the auto industry worldwide. Automakers like Toyota, Honda, Mercedes, and Porsche are experiencing significant profit declines and increased costs due to ongoing trade tensions. This page explores how tariffs impact car companies, whether prices will rise for consumers, and what automakers are doing to adapt. If you're wondering how trade policies influence the cars you buy or the profits of global automakers, read on for clear answers.
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Why Are Automakers Expecting Lower Profits in 2025?
Automakers are facing a tough year ahead, with many predicting lower profits in 2025. Factors like tariffs, supply chain issues, and declining demand are hitting the industry hard. If you're wondering why your favorite car brands are struggling financially and what this means for car prices and availability, you've come to the right place. Below, we answer some of the most common questions about the current state of the auto industry and what to expect in the near future.
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