Japanese Automakers Warn of Billions in Tariff Losses

Toyota, Honda and Nissan forecast big hits to their profits from higher tariffs that they acknowledged were likely “here to stay.”

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By River Akira Davis

Reporting from Tokyo

Nov. 7, 2025

Japanese automakers warned that President Trump’s trade tariffs will cost them billions in lost profits, describing the import duties as a “new normal” that the industry will be forced to endure for the foreseeable future.

The cautionary message came two months after a trade agreement that Japan negotiated with the United States took effect. Under the deal, Tokyo agreed to invest $550 billion in the United States in exchange for a 15 percent across-the-board tariff on its exports. Mr. Trump had initially imposed a 27.5 percent tariff on Japanese exporters, a devastating tax for the country’s crucial automotive sector.

Japanese auto companies have publicly expressed gratitude for the government’s negotiation of a better rate, but many industry executives have privately complained that even a 15 percent tariff erodes already thin profit margins for manufacturers. They are concerned that the tariffs may stick even beyond the current U.S. administration.

The United States is the largest market for Japanese carmakers. Despite building extensive American manufacturing capacity, a large share of the cars sold there — along with their parts — are still sourced from Japan, constituting its largest U.S. export.

Honda Motor announced on Friday that it expected the tariffs to cut its profits for the fiscal year through March by approximately $2.5 billion. The profit hit “is just the new normal which we believe will continue into the future,” Noriya Kaihara, the company’s executive vice president, said at a news conference in Tokyo.

Citing trade duties and other challenges, including production cuts stemming from recent disruptions in semiconductor supply, Honda lowered its full-year profit forecast by a fifth to $3.6 billion.

The previous day, Nissan Motor said it would have broken even this year if not for the tariffs. Instead, it projected a $1.8 billion loss. “We thought initially, as many in the industry did, it would be a temporary thing, but now it is here to stay,” said the automaker’s chief executive, Ivan Espinosa.

Japan’s largest carmaker, Toyota Motor, said earlier this week that it expected tariffs to cost the company about $9.4 billion this year, an upward revision from its August forecast of $9.1 billion. The company said the levies were hitting not only its own exports but also its vast network of suppliers. Toyota said it needed to help its suppliers absorb some of the additional costs.

During a recent trip to Japan, Mr. Trump praised Toyota as one of several companies committed to increasing U.S. spending. He said Toyota would sell American-made vehicles in Japan and would spend $10 billion constructing auto plants “throughout the United States.”

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At a news conference on Wednesday, Kenta Kon, Toyota’s chief financial officer, reiterated that the company had made no formal $10 billion commitment, but pledged to “continue to make sizable investments in the United States.” Selling American-made vehicles in Japan was a possibility Toyota would consider, Mr. Kon said.

River Akira Davis covers Japan for The Times, including its economy and businesses, and is based in Tokyo.

A version of this article appears in print on Nov. 8, 2025, Section B, Page 3 of the New York edition with the headline: Japanese Automakers Warn of Seeing Billions in Tariff Losses. Order Reprints | Today’s Paper | Subscribe

See more on: Honda Motor Co Ltd., Nissan Motor Company Ltd., Toyota Motor Corporation

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