With every government policy there is always the rise of unintended consequences. The policy is destined to do something positive, to correct a wrong, to make something better and often whatever has grown up around the old policy has to change. President Trump imposed tariffs and he was thinking of the big items that could be manufactured in the US. The reality is people send packages to family and friends as well as many small and medium sized businesses rely on shipments. The trend has increases with Amazon and relatively low cost shipping so people can order almost anything and they do on a smaller scale.

In an article by Demetris Nellas and Mae Anderson of the Associated Press, ever since tariffs were announced there was an exemption for low-value packages coming into the US. The reason was often it was family sending family items. The exemption known as “de minimis” was for packages less than $800 in value to come into the US duty free. According to US Customs and Border Agency it amounted to 1.36 billion packages sent in 2024 for a value worth $64.6 billion.

It was set to expire and postal services across Europe said they were no longer shipping the packages because someone has to pay the new import duties. In the UK, they would add a 10% duty before shipping.

DHL, the largest shipper in Europe note key questions remain unresolved, how and by whom customs duties will be collected in the future. what additional data will be required, and how the data transmission to the US Customs and Border Protection will be carried out.

A trade framework agreed to the US and the European Union set a 15% tariff on the vast majority of products shipped from the EU. Packages worth less than $800 are also subject to the tariff.

In the Netherlands, PostNL said the Trump administration is pressing ahead with the new duties despite US authorities lacking a system to collect them. PostNL is working with its US counterparts to find a solution. In government there would be overlapping agencies involved and that takes time to find a solution.

If you still believe foreign governments pay the tariff, you are mistaken.

Linking to dividend paying stocks, governments are a wonderful thing, and we all need them, but eventually they make policies which have unintended consequences. Companies do the same thing, but companies tend to be more adaptable, governments will say this is the policy, The people will acknowledge the problem, but the solution is with someone else and not them. Often times in business, the person to help find a solution is closer by, for your investments are the solutions really closer to the customer?

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

The two largest economies in the world seem to be on different paths when it comes to energy development. In the US, oil is king and anything which does not enhance it seems to conflict with government policy. In the US, the President does not like windmills, although there are windy parts of every country, however he wants to stop them. The President stopped or slowed down solar installations, although the sun shines everyday of the year.

In an article by Ken Moritsugu and Ng Han Guan of the Associated Press, the second largest economy in the world is China and they are working on the world’s largest solar farm on the Tibetan plateau. It will be the size of Chicago.

China is installing solar panels far faster than anywhere else in the world and carbon emissions are down in the first 6 months of 2025, compared to a year earlier.

China’s emissions had fallen in the past, but that was due to a recession, this time demand for electricity is growing, it is up 3.7% this year.

Lauri Myllyvirta, the Finland based author of the study and lead analyst at the Centre for Research on Energy and Clean Energy. She analyzes the data and publishes it on the UK based Carbon Brief website. China installed 212 gigawatts of solar capacity in the first 6 months, which is more than the 178 GW installed in all of 2024 by the US. Electricity for solar power has overtaken hydro power in China to become the country’s largest source of clean energy. Wind power contributed another 51 GW.

The Tibetan plateau in Qinghai province is largely desert and the solar panels allow sheep to graze on the plants and act as a windbreak to reduce dust and sand and slow soil evaporation. When competed there will be 7 million panels which is enough power for 5 million households.

Transmission lines connecting Quinghai province to Henan province is operational and another line to connect to Guangdong is under construction.

One can imagine, solar farms of this size have the ability to drive down the costs of solar panels, increase employment and provide for employment and whatever company to have relatively low-cost electricity to sell to urban consumers.

Linking to dividend paying stocks, every company in the world does a SWOT – strengths, weakness, opportunities and threat analysis. One of the strengths of the any location is the weather, why people live where they live. In the early founding of the country, people lived near the sea because ships were the prime mode of transportation, rivers were found and where there are rapids, hydro power can be harnessed for inexpensive electricity. Now companies can be anywhere but capitalizing on the weather seems to be a good idea for the future.

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

For every government industrial policy is a complex situation because every government wants its people to be productive, its people reasonably well paid and its people to have good lives. In the world of industrial policy, there are building blocks and at the basic level every government wants those building blocks in its country. The issue is somebody needs to buy the output of the industrial companies. When government gets involved in any industry, invariably it will have different goals than outside investors. Does the company layoff people? how well are people paid? what is the reason for owning the shares? and the list goes on and on. For investors are more interested in their return.

In an article written by Michael Liedtke and Elaine Kurtenbach of the Associated Press, President Trump is changing US industrial policy. The government will take a 10% equity stake in Intel, the shares would be non-voting. The government has taken equity stakes in the past, usually preferred shares and some of the companies recovered after a few years the government made profits when they sold.

Intel the company was once a industry leader and many laptops have a little sign Itel inside, but the personal computer boom changed to mobile and now has changed to AI and Intel missed the mobile and has been slow to the party for AI. The computer chips that Intel is very useful for lower value which many companies used in electronics. The chips are not AI chips.

Softbank Group Corp has made a $2 billion investment in Intel for 2%. Intel’s market value is about $110 billion.

Intel has received money from the CHIPS fund of $2.2 billion of the $7.8 billion that it is pledged. Part of the funds was to built a chips factory in Ohio which has been in the works since 2022.

Linking to dividend paying stocks, while governments and corporations work together and sometimes it is seamless, it is rare for the government to directly take ownership positions in companies. The reason is while they have the same end, how they get there will be the issues. Government has many indirect ways to help corporations including research at universities, offering tax credits or incentives, but generally it is better that they do not take a equity position.

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

As investors you have 2 sides or a ying and yang, you are often a consumer and an investor. Sometimes the two will mesh with each other and you will be delighted as an investor and sometimes the traits that make the stock good from the investor point of view is lousy for the consumer, unless you are one of the exceptions to the normal business practice.

Many years ago working for a bank, some of the benefits were free checking, higher savings rates, lower interest rates to pay and a host of good things. After leaving the bank, all the things consumers said was wrong, it was easier to see, but still the stock was kept and added to.

A book from the consumer side of banking, in particular the Canadian banking is called Fleeced by Andrew Spence, published by Sutherland House, Toronto, Ontario, 2024. In the book, Mr. Spence outlines how the banks charge higher fees than comparing to either US banks or UK banks.

When it is very good to write a check when there is money in it, the NSF fee in Canada is $50 and to avoid it, the bank charges an overdraft fee per month such as $5.00. In Australia the bank fee is $5.00 Why is that important for a Canadian bank with $400 billion in consumer deposits, the fee income will be in the $4 billion range. A UK bank with $400 billion in consumer deposits takes in $2 billion in fees.

Banking’s key statistic is net interest income, the difference between what it pays you for your savings and what it makes on its loans. In Canadian banks, that is 52% of their income, the other 48% is fees, commissions, income from trading stocks, bonds and other financial products.

Canada’s small group of very large banks so thoroughly dominate the market for financial services that it can manipulate prices, stifle innovation. and choke off or buy competitive threats. The gains flow to the banks and their shareholders.

Credit card interest rates is a cash cow because in 1981, the interest rate on Visa and Mastercard was 25%, the bank rate was 21% or a spread of 2.25%. In 2024, the interest rate is 20%, the bank rate is about 7% or a spread of 13%.

There are other examples in the book about how the financial system is not very consumer friendly, but how good are the returns and how consistent are they: In the years of 2022 and 2023, TD and BMO have operations in Canada and the US – in Canada their return on equity for domestic personal and commercial banking was 37% versus 14% in the US.

Linking to dividend paying stocks, this case was used because the Canadian banks are very profitable companies and there are reasons. The reasons are as an investor you should consider owning shares in the companies is the profits are consistent. Will the government or the market change things, highly unlikely which means the patterns should continue into the future. In other sectors analyst discuss subscription or fee income, some industries do it better.

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

If you planning for retirement books, one of the phrases is having enough money to maintain the lifestyle you have been living. That phase can easily be individualized because while most people want the same things, how they go about is often very individualist. Recently read a report which suggested even though the US economy is 60% based on consumer spending, those with an income of over $250,000 per household is driving 50% of that spending. The others face all the pressures of higher prices and increased fees.

In an article by Lydia Depillis of the New York Times News Service, economists have been waiting for that multi-faceted storm system to hit the economy and the signs of the storm are everywhere, but what will be the severity of the impact?

James Egelhoh, chief economist with BNP Paribas, thinks the economy is going through a soft patch rather than entering a deep recession.

Plenty of indicators suggest that inflation and the labor market are headed in the wrong direction.

Price growth has sped up, particularly in categories of goods that are heavily imported and now steeply tariffed. One measure is the wholesale price index which is at the highest level since November 2022.

Spending has held up, particularly among higher-income consumers, according to credit card data analyzed by the Bank of America.

Economists are not surprised that tariffs are taking a while to filter into sticker prices. The President’s policies have not been consistent, some are on, some are exempted for a while, some have been threatened but not imposed. However, many countries in Southeast Asia the opportunity to bring in goods before the tariffs has gone.

In the labor market, there is a softness as the Bureau of Labor Statistics reported a large downward revisions to job creation over the past few months.

Some of it is related to AI tools being used by business and need for less people. Some of it is related fewer immigrants in the country as related to the immigration policies of the government. Losing 300,000 government workers likely did not help.

Mark Valentino, President of Citizens Bank, expect the President’s policies will have a impact on the second half of the year.

Linking to dividend paying stocks, when you are investing you are always wondering is the glass half full or half empty. There will be signs of both but it helps if your investments include companies that have near monopoly like conditions. For example, an utility has a near monopoly as long as the economy is doing okay, because people need to turn on the lights. If the economy goes down, there are longer periods when people do not pay bills on time or accounts receivable go up. However, if the number remains relatively low, then the company should be able to make a profit and pay dividend. Often the price of the stock does not double, but it does move upwards because of consistency of earnings.

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

In the last election, President Trump wanted US steelmakers to make more steel in the US, although when he built some of the buildings with his name of them, he used imported steel. However, he needed the votes and vowed to protect domestic steel making. All eyes went to Pittsburg because at the legacy of Andrew Carnegie and the US Steel as the number one steel maker in the world. Mr. Carnegie died in 1919 and much as changed, including US Steel is not the number one steelmaker in the world. Earlier this year, President Trump gave approval for Nippon Steel to buy the company for $14 billion.

In an article by Marc Levy of the Associated Press, there was an explosion at the steel making plant in Clairton, Pennsylvania which is located in the Mon Valley just outside of Pittsburg. The explosion was significant besides killing 2 workers and injury to 10 others, it took hours to find 2 missing workers beneath the charred wreckage and rubble.

It will considerable amount of money to fix the damage or the spending of more money than anticipated. The production of the facility will be down for a considerable period because the blast affected 2 of the blast furnaces and the other 4 are on reduced production because of the explosion.

Accidents are nothing new at Clariton, the coke ovens use high temperature to make coke. a key component in steelmaking and produces combustible gases and its byproducts.

In the early 1970’s US steel production led the world thanks to 62 coke plants and 141 blast furnaces. No one in the US has built a blast furnaces since. The world leader is presently China and they are heavily invested in coal-based steelmaking. New technology of electric arc furnaces which use electricity not coal. (if you ever heard of Clayton Christensen and the disruptive innovation, you should watch the YouTube video).

Linking to dividend paying stocks, when a company is a market leader the public has some attachments to it, but markets and technology change and it is hard for companies to remain a market leader for generations. It is not impossible, if you examine the Fortune 500 companies from. 1950 to 1970 to 1990 to 2000 to 2010 to 2020 there are changes. It is rare for companies to stay in the group unless they have made acquisitions or merged such as Exxon merged with Mobil to create ExxonMobil and it remains as a top tier company. It is great to own a profitable company which pays dividends but it does not mean you do not continue to evaluate it and look at alternatives.

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

In many industries companies start supplying one company and fortunately that company gains market share and becomes dominant in the industry. The rise of the company lifts all the suppliers and investors are happy. Eventually sales level out, new suppliers come in and then investors examine the suppliers and see how connected they are to the one company and stock prices go down because the dominance is beginning to fade. Often times this takes a couple of decades but it happens regularly.

In an article by Wen-Yee Lee of Reuters, Taiwan’s Foxconn became a global giant by assembling millions of iPhones for Apple. The rise of Foxconn was Apple was conceived and designed in the USA but manufactured in a Foxconn plant in Taiwan. Foxconn has announced in will be manufacturing iPhones in India so there is more diversification for them. The rise of iPhone this year is iPhone 16 has been very good for suppliers such as Foxconn.

Recently Foxconn has been diversifying into making AI servers and other cloud and networking products so these products are its main business. The AI servers are going to companies such as Nvidia which is one the cutting edge of AI silicon chips.

For Foxconn, consumer electronics accounted for 35% of total revenue in the 2nd quarter down from 54% in 2021. While cloud and networking business represented 41% of total revenue.

Foxconn has been the manufacturing choice of chips for Nvidia since 2002 starting with producing reference designs for Nvidia’s graphic cards. The AI servers and cloud service for data centers started in 2009. At the moment, Foxconn is one of the world’s largest suppliers of both general-purpose and AI servers with a market share of nearly 40% in each category.

Foxconn has announced plans to build new production facilities in Houston and in Mexico.

Foxconn is expecting its AI server revenue to grow 170% in the 3rd quarter of this year.

Linking to dividend paying stocks, when a company is the dominant market share, investors examine the suppliers because the company does not do everything. As long as the company retains it dominant share it lifts the supplier companies, but for the supplier company you need to pay attention to diversification of revenues otherwise as some point alternatives need to be found through your homework.

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

All countries around the world have government bodies that do business for the government, they are similar to private sector companies in they buy goods and services for the country, particularly agricultural products. If you want to follow how well the people are being fed, watch the agencies that buy food.

In an article by Naveen Thukral and Ella Cao of Reuters, China state-run trading firm COFCO has booked a cargo of about 50,000 tons of new-crop Australian canola.

The purchase would mark China’s first imports from Australia since 2020 when China stopped importing from Australia. Australia is the 2nd-largest canola exporter.

China needs agricultural imports and uses the purchases as a diplomatic measure, it will buy from one country then turn around and make another country the favored nation.

Also reported was China’s COFCO was increasing the size of the soybean storage facility in Santos, Brazil. In addition, COFCO has hubs in Rosario in Argentian, St. Louis in the US, Nikolaev in Ukraine and Constanta in Romania. The company deals with both the large private sector grain trading companies and states to state around the world.

Linking to dividend paying stocks, when it comes to food, in addition to the private sector companies the state run companies exist to move from the storage facilities to the warehouse to the consumer. Similar to many industries it is both simple and complex, which is the reason to buy a profit making company. There are many buyers and to consistently make profits is both simple and complex, as a shareholder you just have to see the results.

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

Since the 1980’s global supply systems have moved from relatively higher wage countries to low wage countries where there are millions of people willing to work for less money. This was the number one reason why the shift of manufacturing from the US to China. This shift took place for the goods, but what about the profits to be made? For many years countries known as tax havens have existed and will continue to exist. The corporate world uses the tax havens until the country where their headquarters is lowers their corporate taxes to manageable. In addition, other countries are not directly tax havens but corporate tax havens and Ireland is the prime example. However, with President Trump’s tariffs that might be a concern.

In an article by Rebecca Robbins of the New York Times News Service, one of the tariffs the President is imposing is 15% tariff on medicines from Europe. Ireland sends the US billions of dollars worth of cancer medications, weight loss drug ingredients and other pharmaceutical products each year, no other country is close.

For the past few decades, Ireland has been the beneficiary of American drug manufacturers shifting patents and profits to the country to avoid billions of dollars of US tax bills. The free flow of medicine has been the biggest factor towards a shift to Ireland. The problem of US drug companies is if they leave the facilities in Ireland, they face a larger tax bill; if they bring manufacturing to the US, they face increased costs.

Most executives and other employees of multinational drug companies are in the US. So are a majority of their labs, clinical trial sites and sales.

According to Martin Sullivan a tax economist who writes for Tax News, the largest drugmakers booked 91% of their profits overseas up from 76% in the mid 2010s.

Ireland is where the multinationals produce expensive brand-name medicines.

Where a company holds its intellectual property is more important for its tax bill than the locations of its manufacturing, tax experts said.

At present, a vast majority of Ireland’s corporate tax revenue comes from multinational drug companies and tech companies. In a typical arrangement, the Irish subsidiary and its parent company enters into a licensing deal: the subsidiary get to exploit a drug’s intellectual property, for example funding research. The subsidiary pays the parent company royalties but keeps most of the profits. The profits move from Ireland to tax havens such as Bermuda or Cayman Islands (if you go you will see the names of American financial firms on office buildings).

One solution is change the tax code rather than using tariffs.

Linking to dividend paying stocks, all companies pay taxes but how much is too much and what are good tax strategies that are legal to avoid paying taxes? All companies do them, there is a reason why the tax department at legal firms and accounting firms are large and expansive.

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