By George Glover

President Donald Trump said in October he thought "tariff" was "the most beautiful word in the dictionary" -- but investors don't seem to agree.

Trump's trade policies have sent stocks tumbling over the past month, with investors fretting that the levies he's pledged to impose will cause inflation to flare up and weigh on growth.

The White House has branded April 2 "Liberation Day" because it's when reciprocal tariffs are set to take effect, but the slump in equities could drag on for a while after that. Shares in Ford and General Motors dropped this week after Trump signed off on duties targeting auto makers, and he has threatened to hike import taxes for pharmaceutical companies and chip makers as well.

There isn't an obvious way to play the uncertainty. For the past few years, the go-to trade would have been to load up on Big Tech -- but that hasn't worked in 2025. The Roundhill Magnificent Seven exchange-traded fund, which tracks the share price of seven megacap U.S. tech companies, has dropped 14% since Trump took office on Jan. 20.

Some parts of the market have weathered the storm, though. To find a list of stock picks that look tariff-proof, Barron's screened for names that are in the green for the year and managed to eke out gains on days when the threat of levies sent the S&P 500 tumbling. Tariff talk has led to the benchmark index closing at least 1.5% lower on five occasions since Trump returned to the White House: Feb. 21, Feb. 27, March 3, March 6, and March 10.

Barron's also wanted its picks to be either cheap or fairly valued, so filtered to exclude any stocks trading at a price-to-forward earnings ratio of more than 20. That left just 12 names.

Telecommunications companies AT&T and Verizon Communications were two of the headliners. Analysts don't expect tariffs to make much of a dent in their bottom line, and investors have tended to like the stocks during turbulent times because they are reliable dividend payers. AT&T's dividend is yielding 3.94%, while Verizon pays out at 6.03%.

PepsiCo also features on our list. Although some of the beverage maker's costs could rise if Trump imposes tariffs on products such as coffee and fruit, it's less exposed than much of the market -- and trading at a significant discount to its closest rival, Coca-Cola.

The other cheaper stocks that have so far looked immune to Trump's tariffs are: Marlboro cigarette maker Altria Group; pharma companies Bristol Myers Squibb and Johnson & Johnson; food processors Conagra Brands, General Mills, and Kraft Heinz; aerospace and defense company Northrop Grumman; and wholesale food distributor Sysco.

Write to George Glover at george.glover@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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March 28, 2025 08:57 ET (12:57 GMT)

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