As President Donald Trump implements new tariffs on imports from across the world, Toyota said it expects to take a massive hit.
The company said in its latest investor report on Thursday that it expects a $9.5 billion impact on operating income. The U.S. began collecting a 15% tariff on goods from Japan on Thursday. Japan is the fourth-largest exporter of goods to the U.S.
Japanese Prime Minister Shigeru Ishiba said that the automotive industry is among many impacted in Japan.
"We intend to make all-out efforts as we take steps to minimize the impacts on each of those item categories and be able to mitigate any impacts that do arise," he said.
In 2024, Toyota sold 2.33 million vehicles in the U.S. Data shows that Toyota ranks No. 2 for new vehicles sold in the U.S, trailing only General Motors.
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Most economists believe the higher costs companies face due to tariffs will be passed along to consumers.
In the trade agreement President Trump reached with Japan late last month that brought about the 15% tariffs, the White House said, "Longstanding restrictions on U.S. cars and trucks will be lifted, granting U.S. automakers access to the Japanese consumer market; U.S. automotive standards will be approved in Japan for the first time ever."
The new tariffs have raised the effective tariff rate paid by U.S. consumers to the highest level since 1934, according to the Yale Budget Lab. The effective tariff rate is now 18.3%, up from 16.6% prior to the implementation of the new tariffs.
President Trump has implemented tariffs in hopes of boosting manufacturing jobs in the U.S. Although Toyota is based in Japan, it has 10 manufacturing plants in the U.S.
