Tariffs introduced by US President Donald Trump are dealing a serious blow to Toyota. In the fiscal year ending in March 2026, the Japanese automotive giant forecasts a drop in net profit by up to 34.9% and is preparing for a more than 20% decrease in operating profit. However, there is a positive aspect—the company does not plan to raise prices, at least in the near future.
The financial report dated May 8 indicates that operating profit in the next fiscal year (until March 2026) will decrease by 20.8% to 3.8 trillion yen (approximately $26 billion). For comparison, last year this figure was 4.8 billion yen. The company is also concerned about an almost 30% drop in net profit to 3.1 trillion yen (approximately $21.5 billion).
Tariffs are not the only cause of Toyota’s financial problems. The strengthening of the Japanese yen against the dollar is expected to impact the company by 745 billion yen (approximately $5.1 billion). Rising material prices will cause additional losses of 350 billion yen (over $2.4 billion). Due to rapid changes in Trump’s tariff policies, Toyota cannot yet accurately assess their full impact but forecasts losses of 180 billion yen ($1.2 billion) for April-May alone.
“Since the government and its agencies are still working on the details, US customs tariffs may change,” stated Toyota President and CEO Koji Sato. — “It is very difficult to predict further developments. On the other hand, we have already accounted for the impact of those measures that have already been implemented in our forecasts for this fiscal year.”
Despite this, Toyota’s sales in the US remain stable. CFO Yoichi Miyazaki reported that the brand plans to sell 2.94 million cars in North America in the current fiscal year, which is 8.8% more than last year. He added that “Toyota will not take short-term measures, such as raising prices due to tariffs.”
In a conversation with journalists, Sato also noted that some cars intended for the US might be redirected to other markets: “It would be ideal to supply products to the US, where we have many customers,” he said. — “But in the short term, we should also consider the possibility of adjusting supply directions.”