Trump's 25% Auto Tariff: A Tesla-Ford Comparison

This study empirically investigates the impact of the 25% tariff on imported automobiles, a key trade policy enacted by the Trump administration on April 2nd, focusing on its effect on two leading U.S. automotive manufacturers, Tesla and Ford. Utilizing data from the S&P 500 stock market, the analysis is structured around the event study methodology. This involves the precise delineation of event windows around the policy announcement alongside corresponding estimation windows. Through the calculation of firm-specific Abnormal Returns (AR) and their aggregation into Cumulative Abnormal Returns (CAR), the research employs standard statistical tests to establish confidence intervals for these metrics. The core objective is to determine whether the observed market reactions provide statistically significant evidence that the tariff policy materially affected the valuations of these prominent firms, thereby assessing its direct implications for this critical sector of the U.S. economy. The findings contribute to a nuanced understanding of how targeted trade measures translate into financial market outcomes for domestic industry leaders.