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President Donald Trump’s hefty tariffs on several trading partners of the United States have raised fears of a trade war that could push the nation’s economy into recession. A rise in inflation over the past few months has already sparked market volatility, which could last for a longer period or till investors get clarity over the impact of the tariffs.
Given the ongoing market turmoil, cautious investors looking for a steady income and ways to protect their capital may want to hold or buy dividend-paying stocks. Three such stocks are: Adecoagro S.A. AGRO, Salesforce, Inc. CRM and The TJX Companies, Inc. TJX.
Trump’s Tariffs Escalate Recession Fears
Last week, Trump announced 25% tariffs on all imported cars and mini trucks in the United States, which go into effect on April 2. He also announced 25% tariffs on imported auto parts. This came as investors braced for a spate of reciprocal tariffs that will be announced over the coming days.
Trump had already announced 25% tariffs on all Canadian and Mexican imports, which also go into effect on Wednesday after a brief delay. Besides, the President has already imposed a 10% levy on Chinese imports.
Trump said that most of the reciprocal tariffs would remain in place until the end of his term. However, he added that the tariffs will be flexible and narrower in scope and he may give some countries a break from the reciprocal tariffs.
Markets Feel the Heat
Investors are still awaiting a clearer picture of how the tariffs will impact the economy. Markets have turned volatile over the past month on fears that the move will prompt other countries to slap retaliatory tariffs, which could weigh on the economy and push it into inflation.
Higher inflation was already rattling stocks as the Federal Reserve has halted interest rate cuts this year. This came after the Fed cut interest rates by 100 basis points between September and December after inflation declined sharply in the second half of 2024.
However, the Federal Reserve has now adopted a cautious approach and is unlikely to go for a rate cut before the second half of this year or till inflation shows signs of a steady decline.
3 Stocks That Recently Announced Dividend Hikes
Given the present circumstances, investing in stocks that pay dividends could be a smart choice. Such companies usually remain stable, consistently distributing dividends while sustaining profitability through strong business strategies. In a fluctuating market, companies that provide significant dividend payments often outperform those that do not.