Driving the news: Toyota slashed its annual profit forecast by $1.6 billion after warning of a massive $9.5 billion hit from U.S. tariffs.
For context: The world's biggest carmaker now expects $31.4 billion in operating income for the fiscal year ending March 2026, down from its initial forecast of $37.3 billion.
Despite the tariff pain, Toyota posted record global sales of 5.5 million vehicles in the first half of 2025, up 7.4% thanks to strong hybrid demand.
Why it matters: Even with Japan securing a "favorable" 15% tariff rate instead of the threatened 25%, Toyota is still facing a profit-crushing blow that shows how any level of trade duties can hamper global manufacturers significantly.
Bottom line: Toyota has a reputation for pessimistic forecasts, and analysts think the company is working on supply chain changes to reduce its tariff burden. But the sheer size of the hit demonstrates that even the most successful automakers aren't immune to the new trade reality.
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