Honda braces for 59% profit drop amid Trump tariffs
Honda predicts a 59% drop in profits for the current fiscal year due to new tariffs imposed by U.S. President Donald Trump, reports Reuters. The company is also pausing its plans to build an electric vehicle supply chain in Canada.
Honda, the second-largest Japanese car manufacturer, anticipates a significant decrease in profits this fiscal year, according to Reuters.
The company's operating profit is expected to be 500 billion yen (3.4 billion dollars), which is a 59% decrease compared to 1.21 trillion yen (8.1 trillion dollars) in the previous year. The primary cause of 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 stems from the slowdown in demand for electric vehicles.
The Japanese giant estimates that tariffs in various countries will reduce its operating profit in the 2026 fiscal year by 650 billion yen (4.4 billion dollars), with 300 billion yen (2 billion dollars) attributed to the impact of tariffs on the import of about 550,000 finished cars.
Honda moves production to the USA
In April, the Japanese corporation announced that it would transfer production of the hybrid version of the Civic model, intended for the American market, from Japan to a plant in the United States.
As reported by Kyodo, due to high demand for this model in the USA, production will be shifted to a factory in Indiana, where gasoline 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.
