US President Donald Trump has proposed a 50% tariff on car imports\nfrom Canada. This policy has the potential to hit Toyota and Honda,\nwhich are the largest players in the Canadian automotive industry.<\/p>\n
Toyota and Honda account for more than three-quarters of Canada\u2019s car\nproduction. If the tariff comes into effect on 1 January 2027 as\nplanned, both Japanese manufacturers could potentially cut or close\nseveral production lines in Canada.<\/p>\n
\u201cIf you truly want to destroy the Canadian automotive industry, you\ncould do it with this tariff,\u201d said Julie Boote, an automotive analyst\nat Pelham Smithers Associates, London, as quoted by Reuters on Monday\n(31\/8\/2026).<\/p>\n
\u201cToyota and Honda would likely have to close several of their\nassembly lines in Canada,\u201d she stated, highlighting the threat of\nclosures.<\/p>\n
According to analysts at Barclays, the impact is significant because\nCanada serves as a vital production base for the US market. Cars\nmanufactured in Canada accounted for nearly 24% of Honda\u2019s sales in the\nUS and approximately 17% of Toyota\u2019s sales last year.<\/p>\n
Both companies are the major producers most exposed to Trump\u2019s plan\nto increase tariffs from the current 25% to 50%. Toyota exports several\nimportant models from Canada to the US, including the RAV4, while Honda\nships the CR-V.<\/p>\n
This tariff policy arrives as Japanese automakers also face\ncompetitive pressure from low-cost Chinese electric vehicles (EVs) in\nSoutheast Asia, Europe, and Latin America. The US remains the largest\nmarket for Toyota and Honda, and is also a market relatively protected\nfrom Chinese competitors such as BYD.<\/p>\n
Toyota has been working to reduce its dependence on production\noutside the US by increasing its investment in the United States. The\ncompany plans to invest up to US$10 billion (approximately Rp177\ntrillion) over five years to expand its US operations, including the\nconstruction of a US$3.6 billion (approximately Rp64.7 trillion) plant\nin Texas.<\/p>\n
For Honda, the tariff pressure comes as the company attempts to\nreverse its loss-making automotive business. \u201cThis would represent a\nmajor shift from the past,\u201d said Seiji Sugiura, a senior analyst at\nTokai Tokyo Intelligence Laboratory, regarding the potential changes to\nthe supply chain due to the tariffs.<\/p>\n
Meanwhile, an executive from a Japanese supplier stated that they\nhave chosen \u201cnot to overreact,\u201d adding that it remains unclear whether\nthe policy will actually be implemented.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/trumps-policy-victimises-toyota-and-honda-potential-for-closures-1788170305", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }