In the grand scheme of things, Donald Trump hasn’t been president for very long, but that hasn’t stopped his policy shenanigans from costing Japan’s automakers big time. So far, they’ve racked up about $28 billion in added costs, thanks to tariffs, electric vehicle disasters and emissions rollbacks, and that spending isn’t expected to change anytime soon. By March of 2027, it’s their costs could top $40 billion.
Toyota expects its impact to total about $17.2 billion over the two fiscal years ending March 31, 2027, and that’s just from Tariffs. Honda isn’t far behind, either, with cots coming in at $15.2 billion. Nissan, which is admittedly smaller than the other two, could take on about $3.1 billion in added costs. From Automotive News:
The pain is coming from multiple fronts, including tariffs imposed by the U.S. last year not only on Japan, but on Mexico and Canada, where Japanese automakers have substantial production.
Last year’s repeal of a federal tax credit, which sharply curtailed demand for EVs in the U.S., also forced a reassessment of electric vehicle portfolios, with several Japanese automakers dropping models or delaying plans, triggering write-downs.
Meanwhile, relaxed U.S. emissions regulations compounded the accounting headaches for automakers that had budgeted funds for stricter rules or had already spent the money.
[…]
Japanese carmakers set operating strategies largely around Biden-era policies that supported free trade and electric vehicles. The mounting costs underscore their struggle in adapting to change under U.S. President Donald Trump with a mixture of investment, rejiggered operations and diplomatic charm.
[…]
All told, Japanese automakers bore up to ¥4.42 trillion ($27.58 billion) in extra costs, impairments and losses across tariffs, EVs and emissions rules in the fiscal year ended March 31, according to an Automotive News analysis of earnings reports from Toyota, Honda, Nissan, Mazda Motor Corp., Subaru Corp. and Mitsubishi Motors Corp.
[…]
Tariffs account for the biggest chunk. The six major automakers doing business in the U.S. put the tariff total at ¥2.44 trillion ($15.23 billion) in the just-ended fiscal year. They estimate tariffs will cost an additional ¥1.92 ($11.98 billion) in the current fiscal year, even as they race to adjust production and other costs under the new trade landscape and shuffle manufacturing footprints.
[…]
The industrywide rollback on EVs also embroiled some Japanese makers, most notably Honda.
Honda’s premature all-in bet on electric vehicles forced CEO Toshihiro Mibe to book ¥1.45 trillion ($9.05 billion) in write-downs as the company canceled EV models and paused production plans. The hit resulted in Honda’s first-ever annual loss in nearly 70 years as a publicly traded company.
Honda is expecting some ¥500 billion ($3.12 billion) in additional EV charges this fiscal year.
There’s really no telling what these costs could balloon to past March of 2027 or what will happen once a (theoretical) more liberal, environmentally conscious White House comes into power. I just hope Akio Toyoda likes his Trump merch.
