Toyota lowers annual outlook as U.S. tariffs hit earnings

August 7, 2025 (MLN): Japanese auto giant Toyota on Thursday revised its annual net profit forecast downward to $18.06 billion (2.66 trillion yen), citing the impact of U.S. tariffs.

"Due to the impact of US tariffs and other factors, actual results showed decreased operating income, and the forecast has been revised downward," the company said in a statement. Toyota shares declined by 0.6% in Tokyo afternoon trade.

The move follows the Trump administration’s imposition in April of a 25%  levy on Japanese cars imported into the United States, delivering a significant blow to Japan’s vital auto sector.

Although a trade agreement was informed between Tokyo and Washington in July reducing the tariff to 15% and offering some relief to the industry the timeline for its implementation remains unclear.

Uncertainty also surrounds whether the reduced 15% tariff will serve as a cap or if it will be added to existing duties. The auto industry already faced a 2.5% t tariff, bringing the current levy to 27.5%.

While Toyota’s revenue for the April–June quarter rose by 3.5%, net income dropped by 36%.

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