Brand new Toyota cars are displayed on the sales lot at Hanlees Hilltop Toyota on March 4, 2025 in Richmond, California.
Justin Sullivan | Getty Images
Newly announced U.S. tariffs on auto imports have rattled Asian automakers, pressuring companies ahead of the implementation of the duties later in the week.
U.S. President Donald Trump last Wednesday announced sweeping 25% tariffs on cars “not made in the U.S.,” sending shockwaves through global automakers.
Shares of Toyota fell 9.4% in the three sessions following the announcement, while Nissan dropped 9.3%. South Korea’s Hyundai lost 11.2%.
Japanese carmakers are particularly in dire straits, with Toyota likely to be the worst hit due to its huge U.S. sales, according to Vivek Vaidya, global client leader for mobility at research firm Frost & Sullivan.
According to U.S. car marketplace Carpro, Asian automakers made up six of the top eight automakers in the U.S. by sales volume in 2024. Toyota took the top spot with 1.98 million vehicles sold during the year, beating domestic heavyweights Ford and Chevrolet.
Japan’s Honda and Nissan were at fourth and fifth places, respectively, while South Korean brands Hyundai and Kia took the next two spots. Subaru came eighth.
The companies’ most recent financial statements reveal that they generate a major chunk of their revenue from North America, which means that any tariff impact is unlikely to be easily compensated.
Toyota and Nissan told that they had no immediate views to share, while the remaining four did not respond to requests for comment.
The U.S. imported $474 billion worth of automotive products in 2024, including passenger cars worth $220 billion, according to Reuters.
A March 27 S&P Global Mobility report revealed South Korea was the second largest exporter of automobiles to the U.S. in 2024 with 1.4 million vehicles shipped, behind Mexico’s 2.5 million, while Japan exported 1.3 million.
“In a nutshell, the USA is an irreplaceable market for Asian automakers. Market leaders from Japan and Korea would be hugely impacted by this [tariff] announcement,” Vaidya said.
Even if automakers wanted to shift production to the U.S. to avoid tariffs, moving factories is not an “overnight proposition,” and will take billions of dollars, said Joe McCabe, president and CEO at AutoForecast Solutions.
Richard Kaye, portfolio manager at asset management group Comgest told that while heavyweights such as Toyota and Nissan have a large production facility in the U.S., they will not be able to increase it enough to offset the tariffs.
“The idea they can remove any Mexican, [and] to a certain extent, Canadian supply from their supply chain is ridiculous. They will face higher prices in the U.S. because of tariffs. And the big question for them is, do I swallow it or do I ask the consumer to swallow it? Presumably, they will swallow it, and that’s going to be very tough,” Kaye said.
But Kaye has a slightly different view from Frost and Sullivan’s Vaidya. He said that Toyota being the biggest player is probably best-placed to weather the tariffs. “But there is no way that they can take this impact with no effect on the bottom line. It’s going to hurt,” he added.
He does identify a bright spot in the Asian automaker space — Japanese automaker Suzuki.
Kaye points out that the company, which does not sell cars in the U.S., has seen its shares fare better than those of its peers.
Suzuki had seen an year-to-date gain of over 1% as of Monday, compared with a 16.45% loss for Toyota and nearly 21% drop in Nissan. Hyundai and Kia have seen losses of nearly 7% and 8%, respectively.
As Suzuki doesn’t sell cars to the U.S., the tariff impact on the company is “zero,” Kaye said. “Suzuki is an India play, and that’s a very exceptional company in this space.”
