Japanese automakers Toyota Motor and Honda Motor are expected to report weaker first-quarter earnings due to U.S. import tariffs and a stronger yen. Toyota’s operating profit is forecasted to drop by 31%, while Honda is expected to see a 36% decline in operating profit. Both companies face uncertainty from tariffs on Japanese auto imports into the U.S.

Investors are closely watching how Toyota and Honda are offsetting the impact of tariffs on their profits. Both companies are facing challenges in the U.S. market, where import tariffs are driving up vehicle prices and testing consumer demand. Honda’s reliance on the U.S. market has deepened as sales in other regions decline.

Toyota’s global sales have risen by 6%, driven by strong demand for petrol-electric hybrids, while Honda’s global sales fell by 5% due to declines in China, Asia, and Europe. Honda has scaled back its investment in electric vehicles to focus on hybrids following slowing demand. Both companies are expected to provide updates on pricing strategy and full-year forecasts.

Shares of Toyota are down 16% this year, while Honda’s shares remain flat. Japanese automakers and suppliers are facing challenges from tariffs and a stronger currency, impacting their earnings. Both companies are taking measures such as transfer pricing to alleviate the burden from import tariffs.

Read more at Yahoo Finance: Toyota, Honda brace for profit falls as US tariffs, strong yen weigh