Honda (HMC) is the latest automaker to warn of a massive hit to its profits as a result of President Trump's auto tariffs.

In its financial outlook detailed in its March 2025 fiscal year report, the Japanese automaker said tariffs would decrease its FY 2026 operating profit by 650 million yen, or $4.405 billion, but that mitigation efforts would decrease that total by 200 billion yen, meaning its net tariff hit would be around $3.05 billion.

Honda said that the total effect of tariffs and currency headwinds would reduce operating profit to 500 billion yen ($3.88 billion) for FY 2026, a massive drop from the 1.34 trillion yen ($9.09 billion) reported in the prior year.

Honda's American depository receipts (ADRs) trading in New York fell 4% in midday trade.

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"The impact of tariff policies in various countries on our business has been very significant, and frequent revisions are made, making it difficult to formulate an outlook," CEO Toshihiro Mibe told reporters, according to Bloomberg.

Honda, which manufactures vehicles in its home country of Japan as well as the US and Canada, earlier said it would shift production of its popular Civic hybrid sedan to the US from Japan as part of its mitigation efforts. Honda will also assemble the upcoming Civic, set for a 2028 launch, in the US instead of Mexico, Reuters reported.

Honda's projection of a steep hit to its bottom line from Trump's tariffs on foreign autos and auto parts is the latest disclosure from a major automaker.

Read more: What Trump's tariffs mean for the economy and your wallet

Auto sector tariffs are taking a hatchet to automaker profits. GM (GM) said its full-year EBIT could take a $4 billion to $5 billion hit from tariffs, Ford (F) said it could take a $1.5 billion hit, and Stellantis (STLA) pulled its guidance altogether.

Toyota (TM) — the automaker feeling the biggest impact — said tariffs would shave $1.3 billion in operating profits just from April and May alone.

Honda and its shareholders are holding out hope that Japanese negotiators and the White House negotiation team will hammer out a trade deal that addresses autos. Currently, a trade deal with the UK has brought auto import tariffs down to 10%, a much more manageable duty for automakers like Jaguar Land Rover and luxury brands Aston Martin, Bentley, and Rolls-Royce.

In other Honda news, the company said slowdowns in EV uptake and tariffs would lead the company to delay an EV battery plant project in Canada by two years.StockStory aims to help individual investors beat the market.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on X and on Instagram.

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