This article first appeared on GuruFocus.
Toyota Motor (NYSE:TM), the global automobile and mobility giant, jumped approximately 1.7% to $197.60 Mondayeven as President Trump threatened to double tariffs on Canadian vehicle imports from 25% to 50%. The clock is ticking: the new rate starts January 1 unless Washington and Ottawa cut a deal.
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Toyota has billions riding on the outcome. Canada supplied roughly 17% of its U.S. vehicle sales last year, while earlier American tariffs already burned through approximately 1.4 trillion yen, or $8.8 billion, during the latest financial year. The company is countering with up to $10 billion of fresh U.S. investment, including a planned $3.6 billion Texas plant. But factories take years. Tariffs can strike overnight.
The pressure is landing as momentum cools. July sales dropped 4.8% globally to 856,125 vehicles, while the previous tariff hit equaled roughly 1.3 times Toyota's latest quarterly operating income. Yet the stock sits 4.68% below its $207.31 GF Value estimate. Monday's rally sends a blunt message: investors are betting the 50% threat gets negotiated down before Toyota gets the bill.