Toyota’s Profits Plummet 37% Amid U.S. Tariff Pressures

Toyota's second-quarter earnings revealed a stark 37% decline in profit, dropping to 842 billion yen ($5.7 billion). The slump is largely attributed to U.S. tariffs, with the Trump-era levies alone costing the automaker an estimated $9.5 billion annually. Despite a 3% rise in global sales, operating profits took a $3 billion hit from these tariffs.

The Japanese automaker has slashed its annual profit forecast by 600 billion yen, now projecting 3.2 trillion yen. Exchange rate volatility and rising operational costs in Japan further compounded the challenges. Yet, Toyota maintains its commitment to strategic investments, sales growth, and cost-cutting measures.

Global demand remains robust, with Q1 2025 sales climbing 7.4% year-over-year to 5.5 million units. However, the tariff headwinds overshadowed these gains, underscoring the fragility of automakers' margins in a geopolitically charged trade environment.