Shares of Toyota Motor and Honda Motor advanced in Tokyo trading on Thursday after a report indicated the U.S. may reduce tariffs on Canadian-built vehicles as part of ongoing trade negotiations.
Toyota’s shares rose 3.7% to 3,050 yen by 04:47 GMT, while Honda’s climbed 1.5% to 1,737 yen. The gains followed a Reuters report citing sources familiar with the matter, which stated the Trump administration is considering lowering tariffs on Canadian-built vehicles from the current 25% to 15%.
The proposed reduction is part of broader discussions between Washington and Ottawa aimed at resolving trade disputes ahead of a scheduled review of the U.S.–Mexico–Canada Agreement (USMCA) next year. The potential tariff cuts would apply to vehicles manufactured in Canada and shipped to the United States, where both Toyota and Honda operate major production facilities in Ontario.
Additionally, the report suggested that tariffs on Canadian steel and aluminum imports could be reduced from 50% to 25%, further easing trade tensions between the two nations. The final terms remain subject to ongoing negotiations, with no definitive timeline for implementation.
The automakers’ shares have benefited from the prospect of improved market access and reduced costs associated with cross-border trade, analysts noted. Toyota and Honda have long relied on Canadian plants to supply North American markets, making tariff adjustments a key factor in their operational planning.
