Honda reports declining profit as Trump’s tariffs and EV moves hurt Japanese automaker’s results

Logos of Honda Motor Co. are pictured in Tsukuba, northeast of Tokyo. (Kyodo News via AP, File)

TOKYO — Honda reported Tuesday a 42 per cent drop in profit for the nine months through December, compared to a year earlier, as U.S. President Donald Trump’s tariffs hurt the Japanese automaker’s earnings.

Tokyo-based Honda Motor Co.’s profit over the three quarters totaled 465.4 billion yen (US$3 billion), down from 805.2 billion yen.

That marked the second straight year that profit declined during the period at Honda, the maker of the Accord sedan, Civic compact and Odyssey minivan.

Sales for the three quarters dipped 2.2 per cent to 15.98 trillion yen ($102.6 billion) from the previous year. Honda stuck to its full fiscal year profit forecast at 300 billion yen ($1.9 billion).

The slowdown in electric vehicles in the U.S. market was one negative factor, according to Honda, while the relatively healthy performance in its motorcycle division worked as a plus.

Honda lowered its global EV sales ratio projection for 2030 to 20 per cent from its previous target of 30 per cent. It also said it canceled the development of some EV models, because the EV market was changing.

The Trump administration, which has favored the oil and gas industry, has backpedaled on prior programs supporting the proliferation of EVs, dismantling programs that kicked in during the Biden administration, which had encouraged environmentally cleaner cars and trucks.

Last year, Trump lowered the tariffs on automobiles and auto parts to 15 per cent from an earlier 25 per cent that he had initially announced. Japan promised to invest $550 billion in U.S. projects.

Tariffs are a major blow to Japan’s export-reliant economy, including the automakers. Last week, Japan’s top automaker Toyota Motor Corp. reported a decline in recent profit, and announced that its chief financial officer, Kenta Kon, will become its new chief executive and president.

Prime Minister Sanae Takaichi, who took office in October as Japan’s first female leader, scored a landslide parliamentary election victory for the governing party over the weekend. That’s expected to make it easier for her Liberal Democratic Party to push forward on its policies, including bolstering growth by boosting government spending, especially in technology and defense.

Honda stock jumped 2.1 per cent in Tuesday’s trading. The Nikkei 225 benchmark finished 2.3 per cent higher, renewing a record high for the second day straight, in a rally set off, in part, by Takaichi’s popularity.

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Yuri Kageyama, The Associated Press