Japan's manufacturing industry, including auto manufacturers, is in turmoil. According to the Financial Times (FT), Japan’s largest corporations, primarily Toyota, Sony, and Mizuho, may lose up to $27.6 billion annually in corporate earnings due to newly imposed US tariffs. So, Japan’s giants are braced for hard times.   

Company executives describe the tariffs initiated by US President Donald Trump as a ticking time bomb. They admit that such measures could slash annual profits by tens of billions of dollars. In case of a recession in the US, Japan’s companies will deal with devastating consequences. Estimates suggest that the total damage may reach ¥4 trillion ($27.6 billion). Moreover, this figure could multiply if the situation escalates.

The $27.6 billion figure cited by FT was calculated by aggregating the projected impact data from the 100 largest publicly listed Japanese companies, including vehicle manufacturers and other major companies.

The automotive industry is the most vulnerable, as Japanese carmakers are now subject to 25% import duties. In 2023, Japan exported 1.5 million vehicles to the United States, valued at over $40 billion.

“The impact of tariff policy is enormous,” Honda CEO Toshihiro Mibe warned. The company is now factoring in additional costs of ¥650 billion ($4.5 billion). As a result, Honda has cut its investment plans through 2030 by ¥3 trillion ($20 billion) to ¥7 trillion.

Meanwhile, US customs revenue is surging. Tariff collections surged by 91% in April 2025 to nearly $15.63 billion from a month ago. This sharp increase followed the implementation of Trump’s newly approved import duties.

Total tariff revenue stood at $8.17 billion in March 2025. That number nearly doubled in April, rising by $7.46 billion in just one month.