Expeditors (EXPD) investor relations material

Tariff and trade developments

• Section 122 tariffs expired July 23 and were immediately replaced by forced labor tariffs, impacting 60 economies with complex duty structures and broad exemptions.

• New Section 301 tariffs on Brazil and forced labor were implemented, with rates stacking for some imports, and Section 201 tariffs reappeared for quartz and lamb meat.

• Section 232 pharmaceutical tariffs introduced a tiered system based on company size, trade deals, and onshoring agreements, with rates up to 100%.

• Section 338 tariffs were used for the first time against Canada, targeting autos, alcoholic beverages, and dairy, with 50% tariffs and no USMCA exemptions.

• Polysilicon tariffs with complex valuation rules are set for December, requiring significant compliance preparation.

Legal and court challenges

• Importers are increasingly challenging tariff actions in court, especially after a Supreme Court win on IEEPA tariffs.

• Section 122 tariffs are under Federal Circuit appeal, with potential for precedent-setting decisions on refund eligibility.

• The IEEPA refund process is ongoing, with over 17 million entries processed and $130 billion in potential refunds; court filings are required for finally liquidated entries.

• Multiple lawsuits challenge the Section 301 forced labor tariffs, arguing they are arbitrary, lack specificity, and violate statutory requirements.

• Courts have historically deferred to executive decisions on Section 301, but current cases may set new boundaries.

International trade relationships

• USMCA review is ongoing, with likely reforms to rules of origin, especially in the automotive sector, and increased enforcement against China-linked inputs.

• US-Canada relations are tense, with new tariffs used as leverage for negotiations; Europe faces regulatory changes and potential new tariffs.

• EU Customs Reform is underway, introducing a centralized data hub and customs authority, with significant compliance implications.

• US-China relations remain cautious, with moderate tariff rates and ongoing negotiations; Asia-Pacific production capacity is rising, with Vietnam as a key player.

• New free trade agreements in Asia-Pacific may shift regional integration and US trade strategies.