The tariff policies that the U.S. abruptly initiated on April 2 under President Trump’s leadership have sent shockwaves through manufacturers worldwide who export to the United States. In the MFP sector, Japanese OEMs hold a significant market share, but today, much of their production is done in Southeast Asia and China and shipped globally. If high tariffs are imposed on products exported to the U.S., American MFP users will have to bear the added cost. As prices rise, it’s only natural that new purchases will decline.
In response to the U.S. announcement on April 9 that tariffs set by country (excluding China) would be suspended for 90 days except for a flat 10%, Japanese MFP OEMs are scrambling to prepare. This includes increasing short-term inventory in the U.S. and urgently shifting production for U.S.-bound products from China—which was initially hit with a 145% tariff—to Southeast Asia. However, because the Trump tariffs fluctuate abruptly, such as the sudden May 12 announcement of a mutual 115% tariff reduction with China through bilateral negotiations, OEMs are unable to make long-term forecasts. As a result, they cannot yet accurately predict this fiscal year’s performance impact.
The immediate challenges for OEMs include the costs of relocating production from China to Southeast Asia, dealing with anticipated sales declines in the U.S. market, and adjusting sales prices. Between April 24 and May 15, nine MFP OEMs disclosed the impact of U.S. tariff policy on this fiscal year’s results in their earnings announcements. However, their assumptions varied: many based estimates on the earlier 145% China tariff level, while companies like Ricoh used 30%, and Epson calculated based on the 20% rate as of March—leading to inconsistent calculations. Still, all reported that tariffs are putting heavy pressure on operating profits. (Frank Cannata says U.S. office equipment dealers should not panic.)
Tariff Policies Impact on Corporate Earnings
■ Ricoh (Announced May 14)
Assuming the U.S. and China’s mutual 115% tariff reduction as of May 12, Ricoh announced an expected tariff impact of ¥13 billion for the year, assuming China’s tariff rate continues at 30% and other regions at 10%. The direct impact would have been around ¥21 billion, but they aim to recover through price adjustments, production site reviews, and cost reductions.
■ Toshiba Tec (Announced May 12)
Based on the earlier 145% China tariff assumption, the company announced it expects an annual ¥12 billion hit to operating profit. When asked by securities analysts, President Hironobu Nishiokori responded, “If the China tariff is 30%, that impact would probably drop by about ¥5 billion, down to around ¥7 billion.”
■ Konica Minolta (Announced May 15)
As of April 24, the estimated tariff impact was around ¥16 billion. Even though recent U.S.-China negotiations suggest the impact might lessen, the company stated its policy remains focused on absorbing the burden.
■ Kyocera (Announced May 14)
Kyocera forecasts a ¥17 billion decline in profits due to the mutual U.S.-China tariffs. For related import-export transactions, the company assumed a uniform 10% tariff rate from April to June and, from July onward, factored in the bilateral tariff levels presented as of May 9. President Hideo Tanimoto explained the ¥17 billion segment breakdown as approximately ¥13 billion from the Solutions segment (mainly machine tools and ICT), ¥2.5 billion from electronic components, and ¥400–500 million from core components.
■ Sharp (Announced May 12)
The company announced it expects this fiscal year’s operating profit in its Smart Workplace business to decline by ¥17 billion, factoring in concerns over the impact of U.S. tariff policies.
■ Brother Industries (Announced May 9)
Assuming the continuation of a 10% additional tariff (145% for China) through the fiscal year end, the company announced measures such as U.S. price hikes to limit the negative impact on segment profit to ¥5 billion.
■ Fujifilm Holdings (Announced May 8)
Fujifilm reported the tariff impact on this fiscal year’s operating profit at $140 million (approximately ¥20 billion, ±$10 million). Regarding its business terms with Xerox in the U.S., President Naoki Hama of Fujifilm Business Innovation explained, “Xerox bears the full tariff cost, so we are not directly affected, but there will be impacts on sales and other areas.”
■ Seiko Epson (Announced May 1)
Assuming a 10% additional tariff and 20% for China, the company projected an increase in tariff costs of ¥17 billion. However, it announced that through U.S. price increases and accounting for sales volume declines due to reduced demand, the negative impact on business profit would be limited to ¥8 billion. Although less than 10% of its U.S. exports come from China, the company announced it is planning to shift some product production to other locations to minimize impact.
■ Canon (Announced April 24)
In its Q1 earnings report on April 24, Canon assumed an additional 10% tariff (145% for China) continuing through December, with total tariff costs at ¥56 billion. It plans to cover ¥42.8 billion through price increases, anticipates a ¥20.5 billion impact from resulting sales declines and weaker demand due to the economic slowdown, and projects a total negative factor of ¥33.7 billion.
