Toyota Expects $9.5 Billion Loss from US Tariffs, Lowers Full-Year Profit Forecast

Toyota, the global leader in automobile sales, announced a projected loss of approximately $9.5 billion due to President Trump’s tariffs on imported vehicles into the United States, marking the highest such estimate among companies thus far. The revised forecast for full-year operating profit was reduced by 16%, reflecting the challenges faced by global manufacturers amid escalating costs from US levies on cars, parts, steel, and aluminum.

Takanori Azuma, Toyota’s finance head, acknowledged the difficulties in predicting market conditions during a briefing, emphasizing the company’s commitment to continue manufacturing vehicles for US consumers, despite potential tariff impacts. The estimated $1.4 trillion yen loss also encompasses the consequences faced by suppliers, particularly those in the US importing parts from Japan. However, specific figures attributable to supplier losses were not disclosed.

Competing companies have reported smaller tariff hits so far. General Motors anticipates a hit of $4-$5 billion for the year, while Ford expects a $3 billion impact on full-year gross revenues. Stellantis forecasts an additional $1.7 billion in expenses due to tariffs this year.

Toyota revised its operating profit forecast for the fiscal year ending March 2026 to 3.2 trillion yen ($21.7 billion), a decline from the previous outlook of 3.8 trillion yen. Initially, Toyota had estimated a tariff hit of 180 billion yen for April and May, but this was solely for the impact on its vehicles. A full-year projection was not issued until now.

Toyota’s North American business reported an operating loss of 63.6 billion yen in the first quarter, contrasting a profit of 100.7 billion yen a year earlier. The tariffs resulted in a 450 billion yen hit during this period. Toyota’s broad production operations, which span US, Canadian, Mexican, and Japanese plants, are subject to tariffs not only on direct exports but also on vehicles and parts shipped within North America.

In the first six months of 2025, Toyota produced over 1.1 million vehicles under the Toyota and Lexus brands in North America, with more than 700,000 units sold in the US alone. The first-quarter results underscore the pressure US import tariffs are exerting on Japanese automakers, despite a potential trade pact between Tokyo and Washington offering relief.

Under the recently agreed trade deal, Japanese auto exports into the US will face a 15% tariff, down from previous levies totaling 27.5%. However, a timeline for this change has yet to be announced. The lack of clarity on this front continues to pose challenges for the industry.

Last week, Toyota reported record global output and sales for the year’s first half, driven by robust demand in North America, Japan, and China, including that for hybrid vehicles. Additionally, Toyota unveiled plans to build a new vehicle factory in Japan, aiming to commence operations early in the next decade, though production models have yet to be finalized.

Toyota’s shares closed 1.5% lower following the earnings release.