Adapting to Tariffs:
Our Focus on P-R-I-M-E Companies

04.03.2025

On April 2, 2025, President Trump announced widespread tariffs, including a baseline of 10%, in addition to any reciprocal tariffs that apply to countries with a significant trade surplus with the U.S.

Major trading partners and other nations facing notable reciprocal tariffs include China (34%, in addition to an existing 20% tariff, totaling 54%), Cambodia (49%), Laos (48%), Vietnam (46%), Sri Lanka (44%), Thailand (37%), Taiwan (32%), South Africa (31%), India (27%), Japan (24%), and the European Union (20%).

These tariffs were much higher than previously expected. The market is responding sharply to the news, with the S&P 500 down nearly 4% and the tech-focused Nasdaq 100 down nearly 4.5%. Small-cap and mid-cap companies are experiencing even greater impacts.

While our portfolios are not entirely immune to these tariffs, we have taken steps over the past few months in an attempt to mitigate their impact by focusing on companies that possess “P-R-I-M-E” characteristics:

  • Pricing Power (to combat inflation)
  • Resistance to Tariffs (insulation from trade disputes)
  • Innovation (adaptability and growth)
  • Management (skilled navigation)
  • Essential products/services (demand resilience)

Our Spring 2025 Rising Dividend Report will feature investment commentary about our strategies in more detail. These recent announcements strengthen our belief that companies with these traits are likely to do relatively well in this challenging environment.

As always, we’re here to answer any questions you may have regarding this situation. Please call us at (812) 421-3211 or email us at dcm@dcmol.com.

Best,
Joe Zabratanski
Chief Investment Officer & Senior Investment Advisor

Donaldson Capital Management, LLC, is a federally registered investment adviser under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply a certain level of skill or training. The oral and written communications of an adviser provide you with information about which you determine to hire or retain an adviser. Information in these materials are from sources Donaldson Capital Management, LLC deems reliable, however we do not attest to their accuracy.

This is prepared for informational purposes only. It does not address specific investment objectives, or the financial situation and the particular needs of any person who may receive this report. The information herein was obtained from various sources. Donaldson Capital Management does not guarantee the accuracy or completeness of information provided by third parties. The information in this report is given as of the date indicated and believed to be reliable. Donaldson Capital Management assumes no obligation to update this information, or to advise on further developments relating to it.

S&P 500: Standard & Poor’s (S&P) 500 Index. The S&P 500 Index is an unmanaged, capitalization-weighted index designed to measure the performance of the broad U.S. economy through changes in the aggregate market value of 500 stocks representing all major industries.

Donaldson Capital Management, LLC, is a federally registered investment adviser under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply a certain level of skill or training. The oral and written communications of an adviser provide you with information about which you determine to hire or retain an adviser. Donaldson Capital Management, LLC, Form ADV Part 2A & 2B can be obtained by written request directly to: 20 NW 1st St #500, Evansville, IN 47708

Unless otherwise indicated, the information above is given as of the date indicated and believed to be reliable. Donaldson Capital Management, LLC assumes no obligation to update this information, or to advise on further developments relating to it. Neither the information nor any opinion expressed in this report constitutes an offer, or an invitation to make an offer, to buy or sell any securities. Any return expectations provided are not intended as, and must not be regarded as, a representation, warranty or predication that the investment will achieve any particular rate of return over any particular time period or that investors will not incur losses. Past performance is not indicative of future results.

This is prepared for informational purposes only. It does not address specific investment objectives, or the financial situation and the particular needs of any person who may receive this report.