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Milken Institute International Chair Curtis S. Chin on the importance of a ‘sustainable’ trade relationship between the U.S. and China and his recent trip to Saudi Arabia, where President Donald Trump will also soon visit.
Toyota executives predict President Donald Trump’s automobile tariffs will cost the company $1.3 billion in April and May earnings.
The automaker, which reported its highest-ever annual profit last year, according to the New York Times, expects profit to decline by roughly 20% in the current fiscal year, it said on Thursday.
The world’s top-selling car manufacturer said it expected operating income to total 3.8 trillion yen ($26 billion) in the year to March 2026, versus 4.8 trillion yen (33 billion) in the year that just ended.
“Whether these tariffs are permanent or not, and what will happen is not something we can decide,” Chief Executive Koji Sato said during a media briefing.
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Toyota Motor CEO Koji Sato, flanked by CFO Yoichi Miyazaki and Chief Officer Accounting Group Masahiro Yamamoto, attends a press briefing for their financial results in Tokyo, Japan May 8, 2025. (Issei Kato / Reuters)
Toyota’s results also show how the tariffs have the potential to hit companies on a number of fronts simultaneously. While the automaker estimated the levies directly costing it 180 billion in April and May, it said currency movement would be the biggest single impact on its full-year forecast, at 745 billion yen.
Uncertainty around Trump’s tariffs and their implications for global trade have weighed on the dollar. For Toyota, a weaker dollar means less profit when U.S. earnings are brought home.
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Employees work on the Yaris Cross car assembly line at the Toyota Motor Manufacturing France (TMMF) plant in Onnaing near Valenciennes, France, April 4, 2024. (Benoit Tessier / Reuters)
Analysts have warned that tariffs could trigger rising prices for buyers in the United States and elsewhere, leading to a downturn in consumer sentiment.
Operating profit for the three months through March was nearly flat, rising 0.3% to 1.12 trillion yen.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TM | TOYOTA MOTOR CORP. | 188.90 | -3.53 | -1.83% |
A Toyota Motor Corp. dealership, right, and Daihatsu Motor Co. dealership in Toyota, Aichi Prefecture, Japan, on Wednesday, April 30, 2025. (Toru Hanai/Bloomberg / Getty Images)
“Right now, things are very rosy in the U.S. just because customers are panicking and rushing to the market to buy cars. But what happens if these tariffs continue? You need to raise prices,” Christopher Richter, an autos analyst at brokerage CLSA, told Reuters.
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“Can you grow sales like that? I don’t know,” he said.
Reuters contributed to this report.
