Distress is spreading in Japan’s auto sector, putting into question Tokyo’s approach to trade negotiations with the United States.

Honda has reported its profit for the fiscal year through March slipped 24.5% from the previous year as its vehicle sales in China dropped.

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.