There is no shortage of news on the tariff front, with new developments emerging daily. Just in the last week, reciprocal tariffs went into effect but were then quickly withdrawn when bond markets destabilized. Left behind were more generalized 10% levies, as well as the existing duty structure on goods from Canada and Mexico, keeping automotive charges largely in place.
In the ensuing days since that abrupt about-face, a somewhat dizzying array of mixed signals have been negotiated and communicated regarding exemptions on goods such as electronics and semiconductor chips, which have an impact on the auto industry in the form of component part costs. More directly, President Trump stated that he was considering pausing automotive tariffs to give manufacturers more time to shift production to facilities in the United States; the details, scope, and timing of those modifications have yet to be finalized.
Average Marketed Price Surpasses $50,000 For the First Time Since December 2024
While these tariff scenarios have been in an ongoing state of flux, one related outcome has not been: automotive retail price increases. Since hitting a pre-tariff low of $48,544 on February 24, Cloud Theory’s Average Marketed Price metric—which reflects the promoted prices on dealers’ vehicle detail pages and includes visible discounts and incentives—has marched steadily upward and surpassed $50,000 for the first time since December 7. While hitting that milestone is big news—as evidenced by the prominent article in Automotive News published on April 14— the slow and steady march upward reflects a broader dynamic.
Regardless of the news of the day, a more insidious effect is at play—one that is likely to continue pushing prices up even if tariffs continue to get kicked down the road. The uncertainty of parts and component costs (and, potentially, availability), coupled with the ambiguity of future-state profitability, are causing manufacturers and dealers alike to be less aggressive with their deals and offers to consumers. Over the course of seven weeks, Cloud Theory’s Market Adjustment metric, which measures the average visible reductions below MSRP, has declined by almost 20%.
The combination of actual tariffs and the potential for them to be used as geopolitical and macroeconomic leverage have contributed to an environment of managed trepidation that will continue to rule the day, and this will keep prices elevated even as this picture comes into sharper focus.
In the end, it’s not just tariffs driving up prices—it’s the fear of what comes next.
