Toyota Forecasts 20% Profit Drop Amid Trump Tariffs, Dollar Weakness

Toyota is facing a significant financial hit due to U.S. President Donald Trump's tariffs, forecasting a profit decline of around 20-21% for the fiscal year ending March 2026. The tariffs, combined with a weakening U.S. dollar and rising raw material costs, are expected to reduce Toyota's operating profit from 4.8 trillion yen to approximately 3.8 trillion yen. Despite these challenges, Toyota has no immediate plans to raise car prices significantly and is focusing on investments for future growth and mitigating tariff impacts. CEO Koji Sato highlighted the uncertainty surrounding the tariffs, complicating business planning, while executives emphasized efforts to maintain profitability through price revisions and value chain enhancements. Additionally, Toyota is contending with broader global market pressures, including a slowdown in China and high labor costs, though its domestic market remains relatively strong. These developments reflect the broader strain on automakers, with U.S. companies like General Motors and Ford also facing substantial tariff-related financial setbacks.