Toyota’s profit fell 37% in the April–June quarter to 841 billion yen ($5.7 billion), down from 1.33 trillion yen a year earlier, as the company was hit hard by new U.S. tariffs imposed by President Donald Trump.

The automaker stated that it had assumed a 12.5% tariff on exports from Japan, but the actual rate was 15%, resulting in a 450 billion yen ($3 billion) loss in quarterly operating profit. Unfavourable exchange rates and higher costs also impacted earnings, despite a 3% rise in quarterly sales to 12 trillion yen ($82 billion).

Toyota has slashed its full-year profit forecast to 2.66 trillion yen ($18 billion), down from an earlier estimate of 3.1 trillion yen ($21 billion), and significantly below the 4.8 trillion yen it earned in the previous fiscal year.

Despite the pressure, Toyota sold 2.4 million vehicles globally in the quarter, up from 2.2 million a year ago, with growth seen in Japan, North America, and Europe.

Analysts believe Toyota is among the worst hit globally by the Trump-era tariffs, more so than many of its Japanese rivals.

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