Honda Motor quarterly profit halves as U.S. auto tariffs bite

Japanese auto giant Honda‘s first quarter operating profits fell 50% year over year on Wednesday, missing estimates due to U.S. auto tariffs and a stronger yen.

Here are Honda’s results compared with mean estimates from LSEG:

• Revenue: 5.34 trillion yen vs. 5.25 trillion yen
• Operating profit: 244.17 billion yen vs. 323.48 billion yen

In the first quarter of its fiscal year, which ends on June 30, Honda’s revenue came in at 5.34 trillion yen, beating mean estimates from LSEG.

Operating profit fell about 50% to 244.17 billion yen, missing LSEG mean estimates of 323.48 billion yen.

The earnings come after Japanese automobile makers began cutting prices on vehicle shipments to the U.S. in response to American President Donald Trump‘s 25% tariffs on imported vehicles, which came into effect on April 3. 

Trump last month announced a new trade deal with Japan that is said to include a lower tariff rate of 15% on Japan-made vehicle imports to the U.S. However, the timeframe for the change to take effect was not clarified.

In June, the value of Tokyo’s car exports to the U.S. fell 25.3% year over year, even though car export volumes to the U.S. rose by 4.6% in the same period, according to data from Japan’s trade ministry.

Auto exports to the U.S. are a cornerstone of Japan’s economy, making up 28.3% of all shipments in 2024, according to customs data.

Japanese Prime Minister Shigeru Ishiba said Monday he would not hesitate to speak with President Donald Trump to ensure the cut to U.S. automobile tariffs is implemented soon.

The country’s chief trade negotiator Ryosei Akazawa left for Washington on Tuesday, seeking to press Trump to sign an executive order that would confirm the exact date for the auto tariffs to be lowered.