Toyota to shoulder U.S. suppliers’ increased costs due to new tariffs - Nikkei

Published 04/04/2025, 16:56
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Investing.com -- Toyota (NYSE:TM)’s North American branch has pledged to assist local auto parts manufacturers with the escalating costs resulting from tariffs introduced by the Trump administration, as per information obtained by Nikkei. The U.S. has implemented an additional 25% tariff on all imported vehicles on Thursday. This tariff is set to be expanded to crucial components such as engines and transmissions by May 3.

The automaker’s move comes as a response to these tariffs, aiming to alleviate the financial burden on suppliers importing from Mexico and Canada. Toyota’s commitment to cover these costs signifies its continuous support for local auto parts manufacturers, ensuring their operations remain viable despite the newly imposed tariffs.

The 25% tariff, which was put into effect on Thursday, applies to all vehicles imported into the U.S. The move by the U.S. government is part of a broader strategy to protect domestic industries.

Toyota’s decision to help offset these costs for its suppliers demonstrates the company’s proactive approach in navigating the evolving trade landscape. By absorbing some of the financial impact, Toyota aims to maintain stable supply chains and ensure uninterrupted production.

The specifics of how Toyota will share these costs with its suppliers are yet to be detailed. Nonetheless, this initiative by the automaker is an important step in supporting its suppliers and maintaining the smooth operation of the automotive industry amidst the newly imposed tariffs.

Toyota’s stock had dropped 4.5% on the day following the news, as investors gauge the potential effects of the company’s decision.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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