Trump Tariffs, Strong Yen Cloud Toyota And Honda’s Earnings Outlook Despite Resilient Demand — Japan Keeps Pressure On US

Toyota Motor and Honda Motor are set to deliver earnings this week that reflect a challenging environment for Japan’s top automakers. 

While both companies have maintained strong unit sales, with Toyota even posting record global volumes in the first half, analysts expect weaker profits due to the drag from U.S. auto tariffs and a resurgent yen, Bloomberg reported.

Toyota’s first-quarter operating profit is likely to have slipped despite resilient demand, citing higher supply chain costs and export pricing pressure. Honda, too, is expected to post softer results, weighed down by the same tariff-related challenges and growth-related spending. 

In June, Japanese automakers cut U.S. export prices by 19%, the steepest drop since 2016, to remain competitive amid disruptions to the pricing landscape caused by tariffs.

Citi analysts said Toyota’s upcoming results will be even more backward-looking than usual, as the effect of President Trump’s latest tariff relief is only now beginning to be felt. 

The White House announced plans to lower tariffs on Japanese auto imports to 15%, but it remains unclear when the full cut will be implemented. The current combined rate stands at 27.5%, which includes a longstanding 2.5% levy.

In Tokyo, Japan’s chief trade negotiator Ryosei Akazawa said the government is pushing Washington to fulfill its commitments.

“We will continue to urge the U.S. side to promptly take measures to implement the recent agreement,” Akazawa said. “After all, a 15% tariff remains in place. We can’t simply say that it is good because we are not at a disadvantage compared to other competitors.”

On Stocktwits, retail sentiment was ‘neutral’ for Toyota and ‘bearish’ for Honda, with message volume remaining ‘low’ and ‘normal’, respectively.

So far in 2025, Toyota’s U.S.-listed shares are down 7.3%, while Honda's shares have gained 9.9%.

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