Japan’s largest automakers face a loss of more than $19bn due to US President Donald Trump’s duties, Bloomberg reported.
Toyota Motor Corp. the world’s largest automaker is likely to be hit the hardest. The company said last week it expects a JPY180 billion ($1.2 billion U.S.) impact on operating income in April and May alone. That figure could be as much as $10.7bn US for the full fiscal year, according to Bloomberg Intelligence. Pelham Smithers analyst Julie Booth forecast $5.4 billion to $6.8 billion.
Nissan Motor Co. and Honda Motor Co. estimate the impact at $3 billion Subaru Corp. which imports about half the vehicles sold in the U.S., also dropped its full-year forecast as it predicted a $2.5 billion loss Mazda Motor Corp. dropped its full-year forecast.
Most vehicles imported into the U.S. were slapped with a 25 per cent duty on April 3, and most auto parts are subject to the levy from May 3. There are some edicts that prevent the tariffs from doubling, but the policy is expected to add thousands of dollars to the cost of cars in the US.
Japanese automakers are now hoping that trade talks will provide a respite as negotiations with the US are likely to accelerate later this month. Prime Minister Shigeru Ishiba has pledged not to accept any agreement that does not deal with auto tariffs, given the importance of the sector to the economy, Bloomberg reported.