Toyota To Reportedly Cover Suppliers’ Costs Owing To Trump Tariffs: Retail Sentiment Plummets

Shares of Toyota Motor Corp (TM) traded over 5% lower on Friday noon, amid broader market weakness, following a Nikkei Asia report that the company’s North American subsidiary has offered to help local auto parts makers with rising costs associated with tariffs announced by the Trump administration.

Trump’s 25% tariffs on all vehicles imported to the U.S. took effect on Thursday. The White House also warned that it plans to place tariffs on some auto parts, such as engines, by May 3.

Toyota indicated to its major suppliers that it would cover the increased cost on parts imported from Mexico and Canada to the U.S., Nikkei Asia reported.

The report said details regarding the assistance, including how long the company will offer it, are yet to be worked out.

The U.S. is Toyota's single largest market. In February, the Japanese automaker sold 175,349 Toyota and Lexus vehicles in the country, trumping the 133,287 vehicles sold in Japan.

The company’s sales in the U.S. accounted for nearly 23% of its worldwide sales during the month.

Earlier this week, Toyota Motor North America reported U.S. sales of 231,335 vehicles in March, up 7.7% on a volume basis, including 196,240 Toyota vehicles and 35,095 Lexus vehicles.

For the first quarter (Q1) through the end of March, Lexus recorded its best-ever Q1 sales results in the U.S. with sales of 83,043 units.

On Stocktwits, retail sentiment dipped from ‘bearish’ to ‘extremely bearish’ territory (15/100) accompanied by ‘normal’ levels of message volume over the past 24 hours.

NYSE-listed shares of Toyota are down by over 17% this year and by over 33% over the past 12 months.

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