Japanese automaker Honda is warning that U.S. auto tariffs are expected to carve a "huge" hole in its operating profit within its current fiscal year, as it manages uncertainty stemming from the trade environment and slowing electric vehicle adoption.

Tariffs could cost Japan's second-largest automaker up to 650 billion yen this financial year—equivalent to $4.4 billion and almost half last year’s profit. Reporting results Tuesday, Honda forecast a roughly two-thirds slide in operating profit for the year through March 2026,

Honda's forecast is the latest signal of the difficulty car makers are having navigating tariffs alongside the rise of Chinese EV producers.

Japanese auto giant Honda missed fourth-quarter earnings estimates as operating profit plunged 76%, with the company bracing for the full impact of U.S. tariffs. Honda's fourth quarter ends March 31.

The first batch of car pricing data since new vehicle tariffs went into effect show an increase as a global trade war upends the industry.

Honda said its plan to build an EV supply chain in Alliston, Ont. — which was first announced in April 2024 — would be paused for about two years, due to uncertainty caused by tariffs.

An East Lansing consultant group categorizes impact in three tiers, with Mercedes, Land Rover and Ford Mach-e among models facing highest cost increases despite recent Trump policy adjustments.

Both nations pledged to cut their broad, ballooning tariffs after weekend talks. US tariffs dropped to 30% from 145%, while China’s moved to 10% from 125%, per a joint statement

The development won’t affect jobs at Honda’s Alliston, Ont., plant, but it comes at a turbulent for the province’s automotive industry

Some companies have not spoken out about what tariffs are costing them, but they have announced some changes in the pricing of their products. Related: Apple CEO sends blunt message on tariffs impact Ford is one company that's been forced to take action in response to tariffs,