The effect of tariffs and lowering the dollar.

The New York Times@nytimes

Breaking News: Toyota said U.S. tariffs would cost it $1.3 billion in profits for April and May, and leave the auto industry “in extreme flux.”

A year ago, the world’s biggest automaker was on a tear. American consumers were snapping up Toyota Motor’s hybrids, and a weak yen inflated the value of the company’s earnings. That May, Toyota reported the highest annual profit ever recorded by a Japanese firm.

On Thursday, Toyota presented a significantly more somber outlook, projecting that its operating profit would decline by about one-fifth for the fiscal year ending in March. It cited headwinds from a stronger yen and predicted a $1.3 billion hit from President Trump’s tariffs in April and May alone.

The company estimated the effect of the auto tariffs, which started in April, only for those two months. Beyond that, their impact is “very difficult to forecast,” Toyota’s chief executive, Koji Sato, said in a briefing on Thursday. “The current environment surrounding the auto industry, including trade relations, is in extreme flux,” he said.

nytimes.com - Toyota earnings trump tariffs