Dividends and US, China settle on first phase of trade deal to avert December tariffs

In mid December the White House gave the economy an early Christmas present when they announced a deal in principle with China. In an article by Andrea Shalal and David Lawder of Reuters, the deal was announced but it maybe narrower that the President suggested it would be in October.

December 15 was the deadline for more tariffs and the US agreed not to go ahead; China agreed to buy $50 billion in agricultural produce in 2020.

The tariff war has put the agricultural sector and so far the President has given more than $28 billion in subsidies for farmers who are affected by the tariff wars. (how fast they went to individual farmers is a different story).

The December 15 tariffs were on Chinese imports such as video games and computer monitors. Just in time for the holidays, prices were expected to be increased, fortunately the prices do not have to go up yet.

Linking to dividend paying stocks, companies can do everything right and still be affected negatively by government policies. It is not unusual, and it does happen. When you are buying shares, understand governments will affect the share price either directly or indirectly, ideally the government announces their intentions prior to doing something which hurts companies and their policies. If you are concerned all companies have shareholder communications to help you navigate through your questions.

There are more questions than answers, till the next time – to raising questions.

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