Warren Buffett-backed Japan trading houses hit by Trump tariffs uncertainty

Japan’s top five trading houses, all backed by Warren Buffett’s Berkshire Hathaway, are predicting their earnings will plummet due to the uncertainty that US President Donald Trump’s trade policy has caused global markets, according to a Nikkei Asia Friday exclusive.

The five, Mitsubishi Corp., Mitsui & Co., Itochu Corp., Marubeni Corp., and Sumitomo Corp., warned this week that earnings for the fiscal year ending March 2026 will take a substantial hit. 

Two of the firms, Mitsubishi and Mitsui, expect their net profits to decline for a third consecutive year. The others project that Trump tariffs will damage their profits by tens of billions of yen.

Profit forecasts drop, but shareholder returns persist

Mitsubishi Corp., one of the largest and most profitable of the group, has predicted a 26% drop in net profit for the current fiscal year. The company said the one-time gains from asset sales that had boosted its performance in the previous period are now absent. 

Yet, the automobile manufacturer announced earlier today that it will raise its dividend by 10 yen to 110 yen ($0.76) per share and will continue with its 1 trillion yen share buyback plan.

Speaking to reporters after the earnings call, Chief Executive Officer Katsuya Nakanishi said shareholder support, particularly from Buffett’s Berkshire Hathaway, has made Mitsubishi confident about the tariff-clouded future.

“We understand that Warren Buffett has placed trust in our strategy and management approach,” Nakanishi remarked.

Mitsui & Co. told investors to prepare for a difficult year ahead. The company projected full-year net income of 770 billion yen ($5.5 billion), a 15% drop from the previous year and well below analysts’ expectations of 853.3 billion yen. 

Shares of Mitsui fell nearly 7% in Tokyo following the announcement before trimming losses. In its statement Thursday, Mitsui cited the US’s “expansiveness and high level of increases in tariffs” as a threat to the global economic balance.

Itochu Corp. was the lone optimist among the five. Thanks to the strength of its non-resource businesses, the company is targeting a record 900 billion yen net profit for the year. It plans to sustain a shareholder payout ratio of 50% and announced a 150 billion yen buyback, equivalent to 2% of its shares.

Meanwhile, Marubeni and Sumitomo each set aside large buffers to absorb potential tariff-related losses. Marubeni allocated 30 billion yen and Sumitomo 40 billion yen in anticipation of headwinds from US trade policy.

Marubeni also announced it would distribute 210 billion yen in shareholder returns and buy back up to 4.2% of its stock, amounting to 70 billion yen. Sumitomo will increase its annual dividend from 130 yen to 140 yen and repurchase up to 2.9% of its shares for a total of 80 billion yen.

“We are heading into something never experienced.” Sumitomo’s CEO reckoned at a press conference Friday morning.

Buffett still confident in Japan investments

In his annual letter this year, Buffett reiterated that Berkshire plans to hold its Japanese house stakes “for the very long term.” As reported by Cryptopolitan, the firms had originally agreed not to exceed 10% ownership in each company, but they relaxed that limit in early April to let Buffett and other US investors buy more shares.

At the end of 2024, Berkshire’s total cost for these holdings stood at $13.8 billion, with a market value of $23.5 billion. In March, shares of the five trading houses went up after Berkshire disclosed that it had raised its stakes by 1.0% to 1.7% in each company. The firm now owns between 8.5% and 9.8% of each.

Meanwhile, the Bank of Japan slashed its economic forecasts on Thursday and now expects Japan’s GDP growth in 2025 to slow down to just 0.5%, down from the 1.1% projection made in January.

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