Honda Trembles Under Duties: Profits Expected to Drop 70% This Year

MILAN – Trade tensions are hitting the Japanese automotive industry hard. After the alarm raised yesterday by Nissan , which will cut more than double the jobs envisaged in the restructuring plan, Honda is also showing signs of concern. The Japanese company expects a 70% drop in net profit to 250 billion yen – approximately 1.53 billion euros – in the 2025-2026 financial year, which began in April. And it points the finger at US tariffs.

Honda's profit already contracted in the previous financial year

After the suspension of reciprocal tariffs announced by Trump on Liberation Day , the basic tariff of 10% is now hanging over Japanese products. This applies to all goods imported into the US, except for automobiles and components of the sector, steel and aluminum, which pay a higher duty of 25% . Honda , the second largest car manufacturer in the country, estimates that the impact of the trade war unleashed by Trump on its annual operating profit is 450 billion yen (2.74 billion euros). For the 2024-25 financial year, which ended at the end of March, the company has already recorded a 24.5% drop in net profit, to 835 billion yen, with revenue up 6.2%, to 21,689 billion yen (132 billion euros).

Nissan closes the year with a loss

Bad feelings also at Nissan . Management confirms yesterday's rumors about cutting 20,000 jobs globally and a reduction in its factories over the next two years. On a financial level, the group's red is worryingly increasing. For the third Japanese manufacturer, the 2024 fiscal year ended at the end of March with a loss of 671 billion yen (4.08 billion euros) , penalized by the slowdown in sales in the United States and China. The number of factories, Nissan warns, will be reduced from 17 to 10 by fiscal year 2027.

Toyota also warns: profit expected to fall by 35%

“The current uncertainty over U.S. tariffs affecting the industry makes it difficult to make any earnings projections,” said Nissan’s new CEO, Ivan Espinosa , who took office on April 1. Even before Honda and Nissan, rival Toyota had announced a 35% drop in net profit for the 2025-26 fiscal year, again citing Washington’s tariff offensive.