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Japan’s Honda has estimated a $3bn blow from US tariffs that will cut annual profits by more than half, becoming the latest carmaker to warn of fallout from the trade war.
The company estimated a hit of ¥650bn ($4.3bn) but said it believed it could offset about ¥200bn through countermeasures such as adjusting production to minimise the tariff impact.
As a result, annual operating profit would fall 59 per cent to ¥500bn in the 12 months ending in March 2026 from ¥1.2tn in the previous year.
“The impact of tariff policies is huge,” said Toshihiro Mibe, chief executive, adding that its modelling represented a worst-case scenario. “This is the bottom. I think the tariff impact will continue to change as time goes by.”
The heavy blow from tariffs and the slow pace of the shift to electric vehicles also led Honda to delay an $11bn investment in EV and battery factories in Canada. The plans were announced 13 months ago.
“In North America, the EV market growth is slowing down so as of now, we think we should postpone at least for two years,” said Mibe.
This is a developing story.
