Japan’s Honda projects plummeting profits due to Trump’s tariffs

Honda’s profit for the fiscal year ending in March decreased by 24.5% compared to the previous year due to a drop in vehicle sales in China. The Japanese automaker warned that President Donald Trump’s tariffs could further impact its earnings. Despite the decline in profit to 835.8 billion yen ($5.6 billion), annual sales increased by 6.2% to nearly 21.69 trillion yen ($147 billion). Honda noted that research and development costs affected their earnings, but they achieved record global motorcycle sales exceeding 21 million units. The company also saw success in hybrid vehicle sales, particularly in the U.S., and improvements in profitability per vehicle. Executive Vice President Noriya Kaihara mentioned that Trump’s tariffs could erase 650 billion yen ($4.4 billion) from Honda’s operating profit by March 2026, primarily due to U.S. tariffs on vehicles from Canada and Mexico. As uncertainties persist, Honda aims to mitigate tariff impacts by transferring auto production to U.S. plants and reassessing investment plans. CEO Toshihiro Mibe affirmed the company’s commitment to producing more electric vehicles. Honda predicts a 70% profit decrease for the fiscal year ending in March 2026, with sales dropping by 6%. Honda’s plans for integration with Nissan Motor Corp. were halted earlier this year, with Nissan seeking to withdraw from the joint holding company proposal due to perceived disadvantages. Nissan’s financial results are expected later on Tuesday.