Canon Plans to Cut Costs and Increase Prices in Response to US Tariffs

Canon recently released its second quarter and first half financial results for the fiscal year 2025, and the news is mostly good in Canon’s imaging segment. However, Canon faces significant challenges concerning U.S. tariff policy.

Canon’s financial results, reported by Canon Rumors and Photo Rumors, detail strong overall performance by Canon’s Imaging Business Unit, which comprises traditional cameras and network cameras.

Canon cites the EOS R5 Mark II as a particularly successful launch late last year, and add that the initial market response to the PowerShot V1 and EOS R50V this year has been positive. Imaging Business Unit sales increased 6.5% in the second quarter this fiscal year compared to the same quarter in FY2024. For the first half of FY2025, Imaging Business Unit sales are up 12.5%. Canon also notes that the R5 II’s success will help the company sell more RF-mount lenses.

In supplementary material, Canon says it expects that its overall camera sales will increase by 5.4% for the entire fiscal year 2025 compared to last year. However, the company revealed in its Q&A session with investors that it anticipates sales in the United States will be negatively impacted by cost increases as a result of tariffs.

Speaking of tariffs, which have already caused Canon USA to increase its prices, Canon says that it saw an uptick in demand in May as customers scrambled to buy products before prices increased, although this demand dampened in June.

Interestingly, when asked about how it will handle additional price increases in response to tariffs, Canon says that it will not evenly apply the same increase across all its products.

“We are currently considering how to best respond to this cost increase, including passing this on through price increases,” Canon explains. “Rather than applying price increases evenly, we will consider this on an individual product basis, taking into account product competitiveness.”

This suggests that Canon will not immediately convert all tariffs directly into even price increases for all its products. This makes sense, and has been seen with competitors’ product pricing strategies as well as each company balances not only cost increases but also overall market position when making price adjustments. This leaves the door open for Canon to absorb some cost increases on certain products when it makes strategic sense.

With that said, while Canon continues to weigh all its options concerning pricing strategy and manufacturing locations, the company says it will broadly aim to dampen the impact of tariffs on its financial performance through “reducing costs and raising prices.”

Photographers will undoubtedly find that particular combination of strategies concerning, although Canon adds that it will seek to reduce costs by returning production to Japan and increasing automation with manufacturing, “with a focus on cameras.” Canon has been working on its manufacturing location strategies for years, sensing increased risk of tariffs and heightened geopolitical tensions, so this move could pay huge dividends as the United States ramps up its aggressive tariff strategies in 2025 and beyond.

“As for price increases, while considering the competitiveness of individual products, we will devise a detailed plan,” the company confirmed in a later Q&A response.

Canon also provided a bit more insight into cameras during its Q&A session.

“The sales of cameras, despite a trend of demand shifting from high-end to low-end products, grew significantly in the second quarter as well,” Canon says. “Although sales in the U.S. are expected to fall in the second half of the year due to price hikes resulting from additional tariffs, we have not changed our plan to sell three million interchangeable lens cameras on a global basis this year.”

To offset the expected decline in U.S. sales, Canon anticipates increasing its sales in Asia and other global markets for the remainder of the fiscal year.

Tariffs are a complex situation for every camera company to navigate, including Canon. The company maintains that its original financial projections remain accurate, although there is little doubt that the risk of tariff-induced sales decreases is very real. While the United States is just one market, albeit a big one, the performance of the U.S. economy has cascading effects felt throughout the world. Canon remains optimistic, although it admits that the outlook for the global economy is “becoming increasingly unclear.”