Toyota Motor, the world’s largest automaker, has projected a stark 20% decline in profits for the fiscal year ending March 2026. Behind this financial contraction lies a tangled web of geopolitical brinkmanship and symbolised most acutely by the destabilising tariffs imposed under the Trump administration.

These levies—brutal in their economic bluntness—have already siphoned off ¥180 billion in mere months. But it is the tumbling U.S. dollar, itself a casualty of erratic policy and fiscal irresponsibility, that is expected to inflict the deepest wound, erasing an estimated ¥745 billion from Toyota’s bottom line.

Chief Executive Koji Sato stood before the press in Tokyo not with clarity, but with the vague resignation of one navigating chaos. The company’s modest 0.3% quarterly rise in profit belies the deeper malaise: a collapsing North American market, a battered Chinese consumer base, and the existential weight of a system that no longer rewards long-term investment or stability.

An 18% profit rise in Japan—Toyota’s last bastion of consistent earnings—offered only a brief reprieve from a broader narrative of decline. Meanwhile, the financial markets, ever short-sighted and twitching with anxiety, punished Toyota’s shares, sending them down 1.3%.