When we look back at history, our world is defined by watershed events. The Vietnam war. Landing on the moon. Watergate. The fall of the Berlin Wall. The rise of the internet. 9/11. Covid. These occurrences have impact that span beyond the events themselves, and cause a sea change in our thinking, our politics, and our very way of life.
The automotive industry has had similar episodes that caused significant innovation and disruption and have resonated for years or even decades beyond their initial onset. The oil shock of the 1970s. Safety improvements. The ascension of Japanese and Korean imports. Bankruptcies and brand discontinuations. EVs.
When we look back through the lens of history, what will the story of the 2020s be? Not too long ago, it was almost a given that the decade would be framed by the Covid pandemic and its aftereffects on the supply chain. The sharp declines in inventory (and subsequent road to recovery) caused prices to rocket upward, reshaped OEM portfolios, and redefined parts procurement and manufacturing processes.
But as prominent as that event was, the current storyline playing out is on pace to supersede it and be the story of the decade. The Trump Administration’s tariff policies on materials, parts, and cars themselves have already caused a massive disruption in the industry-–one that is likely to continue for years to come. Its effect on manufacturing globalization and cooperation, OEM profits, consumer prices, production logistics, and much more cannot be understated.
As is evident from the almost daily flood of news on this topic, the mercurial nature of the tariff rollouts have exacerbated the disruption caused by their implementation. And while it seems that this is a well-worn story, we have barely scratched the surface of its potential consequences.
One key bellwether of tariff impact is on the promoted vehicles prices at retail—what Cloud Theory calls the Average Marketed Price (AMP). As can be seen in the visual below, AMP was falling as 2025 commenced (and had fallen even further from prices seen during the summer of 2024). The rhetoric from day one of the Trump Administration—followed by the implementation of steel and aluminum levies enacted on February 10—triggered a reversal of that trend as OEMs and dealers began to deal with the uncertainties that accompanied these policy threats and realities. From February 24 to May 3, Average Marketed Prices rose by $1,663 to a 2025 high of $50,207.
Over the next month, OEM programs such as Ford’s “From America, For America” employee pricing program, pledges from makes such as Hyundai and Volkswagen to avoid increases, and “wait-and-see” attitudes from makes such as Honda and Toyota led to a short reprieve from these increases, but that appears to have been a temporary outcome.
Some of those programs have expired or are set to do so in the coming weeks, and tariff-related price increases are now starting to be enacted as non-tariffed inventory sells through. And brands that have expressed those wait-and-see attitudes can now point to competitive moves that will make their own actions more palatable and therefore more likely. The Average Marketed Price metric has started to move up again; as of June 5, it sits only $50 below the highest point seen in 2025. And with increases just beginning to flow into the marketplace, the likelihood of further hikes throughout the summer and beyond is high.
While these price movements may seem like short-term reactions to political uncertainty, they’re revealing something much deeper: a structural shift in how the automotive market responds to trade policy. The fact that retail prices are moving so quickly—and in some cases, so sharply—in response to tariff developments suggests that the industry is no longer insulated by inventory buffers or global production flexibility. Instead, automakers and consumers alike are being forced to navigate a new reality where trade decisions have immediate, visible consequences.
As we continue through the 2020s, it’s becoming clear that tariffs will not just be a passing policy disruption—they will very likely become the defining force of the decade for the automotive industry. While pandemics and supply shortages shook the system, tariff policy is steadily rewiring it. We are witnessing a transformation that, much like past watershed events, will only be fully understood in hindsight. But when that time comes, we may very well say: this was the moment when tariffs took the wheel.
