Honda profit plummets as Trump tariffs take toll
Honda forecasts a 59% drop in profits for the current financial year, owing to new tariffs imposed by US President Donald Trump, reports Reuters. The company is also suspending its plans to develop an electric vehicle supply chain in Canada.
Honda, the second-largest Japanese car manufacturer, anticipates a significant decline in profits this financial year, according to Reuters.
The company's operating profit is expected to be 500 billion yen, representing a 59% decrease compared to 1.21 trillion yen in the previous year. The primary reason for this downturn is the new tariffs introduced by Donald Trump's administration.
The company announced it is suspending its plan to build an electric vehicle supply chain in Ontario, Canada, for about two years. This decision results from the slowdown in demand for electric vehicles.
The Japanese giant estimates that tariffs in various countries will reduce its operating profit in the financial year of 2026 by 650 billion yen, with 300 billion yen attributed to the impact of tariffs on importing roughly 550,000 finished cars.
Honda relocates production to the USA
In April, the Japanese corporation announced the transfer of production of the hybrid version of the Civic model, intended for the American market, from Japan to a plant in the United States.
According to Kyodo, due to high demand for this model in the USA, production will be moved to a factory in Indiana, where petrol engine versions are already being produced.
Mitsubishi Motors previously decided to suspend shipments of new vehicles to American dealers in response to Trump's recent decisions. The company does not have factories in the USA and delivers all vehicles sold in that market from Japan and other countries. Audi made a similar decision.
