One of the reasons why you buy dividend paying stocks which are profitable is because they should be resilient and adaptable. Recently in a press conference, the Defense Secretary was asked about plans for the military, and he said, we have plans for everything. One hopes that companies have the same ability to have plans and be adaptable to what the government proposes.

In an article by Emiliano Rodriguez Mega of the New York Times News Service, is about a Mexican factory. Danfoss is a HVAC company headquartered in Denmark and has operations around the world. It built a factory a few hours from Texas to supply the US as 80% of its air conditioners and refrigeration units were sent to the US.

When President Trump put on tariffs, first they sought out Mexican suppliers for products bound for the US. The market was not big enough, they managers analyzed which products already complied with the pact’s rules but had not yet been certified as such.

Today, virtually all Danfoss products shipped from Mexico to the US comply with the trade deal of USMCA. The next step is to make some of the components in Apodaca, where the Danfoss factory is instead of relying on China which will help in mitigating the impact of punishing US tariffs.

Until now, Mexico’s trade strategy was closely tied to Asia. Bringing in supplies from there was financially viable because of the low costs: instead of thinking how to manufacture things here, Xavier Casas, who oversees the factory says he would import them from China. Now he is thinking why not manufacture them in Mexico?

After July 9th, President Trump’s deadline, what is expected is some products will be lower and some significantly higher.

The top officials at the Mexican Economy Ministry, said more exporters wanted to show their products were mostly manufactured in North America with materials mostly sourced from the region. Data shows 87% of Mexican exports are now free of US tariffs.

Linking to dividend paying stocks, when politicians change the rules, which they are allowed to do, it takes time to adjust to the new rules. Many profitable companies can do that, as long as the next step is some form of stability, the rules last so they can plan. The tariffs were a good indicator how flexible your investments are, how did they adapt?

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