THUNDER BAY – INTERNATIONAL BUSINESS — Honda Motor Co. has warned of a sharp 59% decline in profits for the current financial year, as the Japanese automaker grapples with the combined pressures of U.S. President Donald Trump’s renewed tariffs on foreign-made vehicles and a rapidly intensifying global EV race dominated by Chinese producers.
The company, Japan’s second-largest automaker, now expects operating income to fall to 500 billion yen (approximately $3.38 billion CAD) for the fiscal year ending March 31, 2026—down from 1.21 trillion yen in the year just ended.
Ontario EV Project Put on Ice
In a blow to Canada’s emerging EV ambitions, Honda announced it would pause its previously announced plan to develop an EV supply chain in Ontario, citing weaker-than-expected global EV demand and market uncertainty linked to tariffs.
The project, unveiled in April 2024, was seen as a major boost for Ontario’s automotive sector and supply chain diversification efforts. Now, Honda says the plans will be delayed for “approximately two years,” leaving industry officials in Canada scrambling to reassess timelines for EV infrastructure development.
Tariffs Deal Heavy Blow to Honda’s Global Strategy
Honda expects to take a 650 billion yen hit to its fiscal 2026 operating profit from tariffs worldwide, with 300 billion yen directly related to U.S. tariffs on imported vehicles—approximately 550,000 units impacted. The company indicated it will attempt to soften the blow, aiming to recoup 200 billion yen through cost-cutting and supply chain adjustments, but the forecast remains grim.
The move underscores the challenges facing global automakers attempting to pivot to EV production while navigating volatile geopolitical trade dynamics.
Merger Talks With Nissan Stalled, But Alliances Still in Play
Meanwhile, Honda confirmed that merger talks with Nissan broke off earlier this year, although both automakers maintain a technology-sharing agreement. CEO Toshihiro Mibe acknowledged the automotive industry’s “very difficult situation,” but insisted Honda will continue exploring strategic partnerships to fuel future growth.
“There’s been no development with Nissan since discussions were scrapped in February,” Mibe told reporters, emphasizing that alliances are now critical to survive in an industry being rapidly transformed by aggressive Chinese EV makers and escalating tariff walls.
Canadian Industry Left in Limbo
Honda’s Ontario pause deals a setback not just to the province, but also to Thunder Bay-area businesses and logistics operators watching closely for spinoff opportunities from major EV investments. The delay adds further uncertainty to Canada’s goal of becoming a North American EV hub, as tariff turbulence and weak demand shake industry confidence.
