Toyota cut its full-year profit guidance on Thursday and revealed it expects to absorb a $9.5 billion blow from U.S. tariffs, marking the largest projected tariff hit among global automakers as the Trump administration’s new trade reset begins to reshape the auto industry.
The full-year tariff impact—estimated at $9.5 billion—represents a more than sevenfold increase of the previously forecasted burden. In the quarter ended June 30, Toyota recorded a $3.1 billion hit to operating income from the tariffs alone.
The company’s North American business swung to a loss for the quarter, posting a $145 million operating deficit, down from a $587 million profit a year ago.
"Despite a challenging external environment, we have continued to make comprehensive investments and as well as improvements such as increased unit sales, cost reductions, and expanded value chain profits, thereby minimizing negative impacts," Toyota said in a statement.
Vehicle-maker rivals Ford and General Motors have projected $3 billion and $4 billion–5 billion in annual tariff impacts, respectively, while Jeep-maker Stellantis said it expects to incur $1.7 billion in added costs.
The White House has defended the tariffs as a way to level the playing field and restore U.S. manufacturing.
The sharp increase in Toyota’s projected tariff burden comes as automakers across the industry face intensifying pressure on profit margins.
“The months ahead are shaping up to be ‘the big squeeze,’ as the real headline this summer will be the growing disconnect between rising costs for automakers and dealers and relatively flat consumer prices,” Erin Keating, executive analyst of Cox Automotive, parent company of Kelley Blue Book, said in a statement.
“As average MSRPs [manufacturer’s suggested retail prices] continue to climb, the modest increase in transaction prices suggests the businesses are absorbing more of the burden and not passing the added costs to consumers—something that will impact profitability if the trend persists.”
Economists widely agree that U.S. tariffs are reshaping trade flows and generating record revenue for the government, but debate continues over how much of the costs will be passed along to consumers.