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Honda to Be Hit Harder Than Expected By Tariffs, Prices Likely to Rise

Last updated May 13, 2025

Key Takeaways

  • Honda’s operating profit plunged 76% amid growing pressure from global tariffs.

  • Several Honda models, including the HR-V and Prologue, are imported from Mexico and Canada and now face 25% U.S. tariffs.

  • Car prices haven’t risen yet, but buyers should watch for potential increases in the coming months.

Honda’s latest earnings report paints a concerning picture for the automaker’s global operations, and new tariffs are playing a major role. The Japanese auto giant posted a 76% drop in operating profit for the fiscal fourth quarter, far below analyst expectations. While revenue grew modestly year-over-year, Honda’s leadership made it clear: global tariff policies are hitting harder than expected, and the uncertainty is making it nearly impossible to plan ahead.

For the fiscal year ending March 31, 2025, Honda reported:

  • Revenue: $191 billion USD, up 6.2% YoY
  • Operating Profit: $656 million, far below estimates
  • Net Profit: $7.5 billion, down 24.5% YoY

Sales fell sharply in China and Southeast Asia, and while Honda’s hybrid sales expanded in North America, the company is now bracing for the full impact of U.S. tariffs.

Honda’s executives directly blamed the steep earnings miss on the unpredictable and widespread nature of global tariffs. In a statement, the company explained that frequent revisions to tariff policies make it difficult to formulate a reliable business outlook.

Looking ahead, things may get worse before they get better. Honda projects:

  • Operating Profit to fall 59% in the fiscal year ending March 2026
  • Net Profit to plunge 70%
  • Revenue to decline 6.4%

Investments Delayed as Priorities Shift

As automakers adapt to shifting trade policies, Honda is already adjusting its strategy. In March, it was reported that Honda will move production of its next-generation Civic Hybrid to Indiana—rather than Mexico—in a clear attempt to dodge the new 25% U.S. import tariff.

Now, Honda is delaying a major planned investment in Canada. “The growth of the electric vehicle market has slowed more than initially expected, making it difficult to anticipate further progress,” CEO Toshihiro Mibe said May 13, while announcing fiscal-year financial results. “Therefore, we have decided to postpone large-scale investments in Canada.”


Honda auto tariff impacts 2025

Despite Honda’s large U.S. manufacturing footprint, several popular models are still imported from Canada and Mexico—and are therefore subject to the new 25% import tariff:

Made in Canada and imported to the U.S.:

Made in Mexico and imported to the U.S.:

For now, Honda has not announced price increases on these models, but any shift in sourcing or supply could quickly push prices higher at the dealership.

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What This Means for Car Shoppers

As of early May, car prices in the U.S. have not increased due to tariffs—at least not yet. However, Honda’s latest guidance and production adjustments suggest that price hikes could be coming soon, especially on vehicles imported from Mexico and Canada. If you’re considering a CR-V, HR-V, or the new Prologue, it may be worth watching the market closely—or acting sooner rather than later.

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