Toyota lowers full-year earnings projections due to Trump's import tariffs.
Toyota Motor Corp. Lowers Profit Forecast Amid U.S. Tariffs
Toyota Motor Corp. has revised its fiscal 2025 net profit forecast downward significantly due to the impact of U.S. tariffs imposed under former President Trump's administration. The company now expects net profit of 2.66 trillion yen (about $18 billion), a 44.2% decline from the previous year.
The tariff on U.S.-bound vehicles had been 27.5% since April but was lowered to 15% following a late July trade deal with Washington. Toyota nonetheless factored the tariff impact into its revision.
In Q1 (April–June 2025), Toyota’s net profit fell 36.9% year-on-year to 841 billion yen amid a 3.5% sales increase, showing short-term financial pressure from tariff costs. The largest negative impact is attributed to the tariff costs directly reducing Toyota’s U.S.-bound vehicle profitability by approximately 1.4 trillion yen.
Despite the challenging circumstances, Toyota's global vehicle sales projection for fiscal 2025 remains at 11.2 million units. This strong sales momentum in the North American market is contributing to Toyota's global vehicle sales. Sales at subsidiaries Daihatsu Motor Co. and Hino Motors Ltd. are included in this projection.
Operating profit for fiscal 2025 is now forecast at 3.2 trillion yen, down 33.3% year-on-year, despite a small 1.0% increase in net sales to 48.5 trillion yen. Toyota expects to improve the operating balance by 899.5 billion yen through higher automobile sales and cost reductions.
However, no adjustment has been made to Toyota's consolidated operating revenue estimate due to the impact of U.S. tariffs. The yen's rise and higher material prices are seen as factors weighing on Toyota's earnings, but no new information regarding cost reductions or the impact of these factors was provided in this paragraph.
The company's operating profit forecast has been cut to 3.2 trillion yen from 3.8 trillion yen, and Toyota's annual net profit is now expected to shrink for the second straight year. The new forecast for the year to next March is a net profit of 2.66 trillion yen, down from the previously forecast 3.1 trillion yen.
According to Hiroyuki Ueda, chief officer of Toyota's External & Public Affairs Group, there was a rush in demand ahead of the introduction of U.S. tariffs. Toyota's sales in the North American market continue to be robust.
In conclusion, the sizeable downgrade in Toyota's profit forecast shows the material adverse effect Trump's tariffs had on Toyota's profitability outlook for fiscal 2025, despite some mitigation from tariff easing in late July 2025.
The U.S. tariffs, although eased in late July, still had a significant impact on the global photo industry, as the tariff costs directly reduced Toyota's U.S.-bound vehicle profitability by approximately 1.4 trillion yen, affecting the overall finance and business operations of the company. Despite the lowered profit forecast, Toyota's global sales projection remains at 11.2 million units, with the North American market contributing positively to this figure.
