Toyota predicted May 8 that its operating profit would decline by about one-fifth for the fiscal year ending in March — or $1.3 billion — because of President Donald Trump’s tariffs in April and May alone.
According to the New York Times, the automaker estimated the effect of the auto tariffs, which started in April, only for those two months. Beyond that, their impact is “very difficult to forecast,” Toyota’s chief executive, Koji Sato, said in a briefing on May 8. “The current environment surrounding the auto industry, including trade relations, is in extreme flux,” he said.
The Times said the pain that Toyota is already experiencing from tariffs also highlights the difficult bind that Japan faces in its ongoing negotiations with the Trump administration.
Although Trump has paused an across-the-board 24% percent tax on imports from Japan until early July, tariffs of 25% on automobiles and auto parts are already hurting the country’s main exports to the U.S. — automobiles and auto parts.
On April 30, Japan’s central bank more than halved its economic growth forecast, citing the imposition of an “unprecedented level” of tariffs by the U.S.
