Tariff Trends 2026: Expert Insights on the Evolving U.S. Customs Landscape | January 8, 2026 Webinar

Hello, good morning everybody. Thank you so much for joining us today for our tariff trends webinar. My name is Marcus Eman. I'm a customs director here at Flexport. Um we have a lot of content to cover. This is a great one, especially with an auspicious day looming tomorrow maybe. Um but before we begin, if you're not familiar with our webinar uh platform before I just want to go over a few housekeeping items on your screen, you'll see a sidebar to the right of the main stage. It's there you can submit questions. At the end of this presentation, we host a Q&A in the webinar and we answer some of the audience questions. We try to get through as many as we can. So, please uh get your questions in early. Um, in that same sidebar, you also see a tab labeled documents. This is where you can grab a copy of today's slides and find some other helpful resources. And above your screen, there's a button that says you can request a duty drawback analysis from Flexport. uh we'll review in further detail later in the presentation, but if you uh do click that button, um please do so if you want Flexport to reach out to discuss a duty drawback analysis for your own business. Okay, with that, let's do a quick um legal note here. Um please keep in mind that all the information in this session is based on the situation at this current moment in time and it may not be customized to your specific business requirements. We always recommend reaching out to a flexport expert to discuss your particular situation. Okay. Uh today um I will be one of the speakers. I'm also going to be joined by Jen Park uh the director of our trade advisory group. Um and she will speak on the other half of this and to show we have our agenda here. Um we're going to start with kind of like a 2025 look back like okay everybody let's just take a deep breath. let us observe and orient ourselves and then take a look at how we want to move forward um from here going into 2026. We also want to leave a nice big chunk here for the AIPA tariff legislation. A lot of questions there. Um rumors that it could be as early as tomorrow at 10 a. m. Eastern from the Supreme Court. We could see um an announcement there on the AIPA case, the learning resources v elections case. We'll talk about how to preserve some of those rights to refunds and how we can support uh and go through a couple other resources for this before the Q&A. Okay. Um so let us get started here. Um and let's take a look back at 2025. And um I'm not the only one to do this here, but I put together my own 2025 timeline uh of what I think was relevant um for this year. What I think really kind of stood out. Um, and you look at this and you feel like there's just so much here that isn't on this sheet, especially if you've been very in tune with a lot of the tariffs that have been announced this year. I just selected some of the top ones, some of the main announcements um, from this year and it looks rather grim if you look back. You look at how far you've come, all the kind of potholes in the road. Um, all these adjustments to different ways of calculating it. Um, increases here, increases there seems really expensive. Um, we look at uh the next slide here and we see all these 232 cases. Some which are already enacted, some are ongoing and they could be coming out soon. Who knows? And you look at this and you think, wow, like where are we? Where do we go from here? How can I predict for this sort of environment? And that's a difficult question. Um, but I am going to start off with maybe a little bit of a light-hearted joke here to make you all feel a little bit better perhaps. I'm going to pause here while I get a drink of water and you can enjoy the comedy uh of this Homer Simpson meme. On the one hand, the administration really puts out there that um these tariffs are working. They're working really well. Um we have a lot of, you know, uh this is really good for our country. They make us strong inherently. But on the other hand, on the other side of it, we're seeing more areas where the administration uh is reducing the amount of tariffs that are effective. They're finding different ways to carve out and reduce and mitigate and override all these tariffs that they've just sort of announced. Uh excuse me, I apologize. I'm getting over a cold here. Um, but anyway, this is a more serious version of that previous slide here where this is from the Yale Budget Lab and the Financial Times. The green line above shows what are the tariff rates based on what the administration is saying. Um, here is this tariff rate. Here's liberation day. Um, here's where the trade deal gets announced. We're going to pause reciprocals. We're going to increase section 232 to 50%. Um, we're going to threaten 50% on the EU as a whole. We get an EU trade deal done. We get a Japan trade deal done. And we see all this here. And even though the announced rates seem pretty high, the effective rates, this black line at the bottom, shows that it's been a little bit more measured and cautious. China, the China month of 125% notwithstanding. Um, it's been generally a calmer uh experience, I think, for most imports. Even though tariff rates

have been high, there have been different ways to mitigate it as a whole throughout the economy. Um, this is where I think we start to see what may be happen in 2025 and what we're going to start to see kind of going forward into the 2026. Another place to sort of look at this as we look at our trading partners for the United States. Um, you see the top 10 listed here, Mexico, Canada, China, all the way on down, those that are highlighted green, these already have a trade deal in place, some way to reduce the amount of tariffs that they did have to pay, some sort of stopping of the damage, limiting of the amount of tariff paid or payable. Um, and any of these ones here in green are listed here. Japan, you know, uh, Germany, South Korea, United Kingdom, all of them have some of these caps on it. Vietnam has a deal announced back in October, not in effect yet, but it's looking very promising. If I expand this out to like the top 20, we see even more here. Um, we include the rest of the EU countries, Ireland, Netherlands, Italy, France, and Belgium. Then the Swiss deal also had their own deal. Thailand, Malaysia have their own deal that they've been working on as well. So, even though the face of it does seem very much like we're going to tariff anybody, anybody anytime in any amount that we want, um Trump and the administration are not immune from responding to economic concerns, I think, within the country. And I kind of found some other kind of highlights here of where's maybe some signs for optimism that even though the rhetoric is way up here, the tariff level is being talked about as though it's skyhigh, maybe the effective rate is a little bit lower. Um, one that we saw was that as of August, uh, 85% of Canadian and Mexican imports to the US were duty-free via USMCA. Recall that AIPA fentanyl for US and Canada and Mexico were exempt if it qualified under USMCA. Uh finally um we or another one we have is we also saw the beef cuts were added to annex 2. Annex 2 was part of the IPA reciprocal tariffs and this was for the naturally unavailable resources that got expanded in November. So they started to include things like bananas, coffee, chocolate, things we can't grow in the United States. But very interestingly, they also included beef, ground beef, cuts of beef, steaks, which we very much can grow in the United States and do. The only problem is the US beef herd is at a 75-year low. So the cost of beef is going up very high. So all of a sudden, even though it's beef is very much not a naturally available resource, the administration did want to include tariff relief for beef uh in all of these trade negotiations as well. So, another indicator that the administration is, you know, wants to at least find certain ways to try to ease the pain and that they're not completely oblivious to the effects of what they're having here. Um, there was another surprise reduction just this year on the um anti-dumping rates for Italian origin pasta from over 100% to like around 15% as low as 2% for some producers. Um, this was a bit of a surprise. Anti-dumping is usually very technical. They usually have very strict rigid surveys and processes they follow. So to see the, you know, uh, proposed rate of over 100% drop down into the 15s also, I think, reflects a cost of living concern for the administration. They don't want to see a very common staple food all in every household in America all of a sudden having to go up in price. Um, another area where we're seeing this, there's a section 301 finding on Chinese semiconductors that would have increased it above the existing 50% rate, but no tariffs for 18 months on that. um section 232 for semiconductors and pharmaceuticals. If you had a sharp eye, you may have noticed that a couple slides up. Um these investigations should take place over the course of 270 days, ending with a recommendation from the US trade representative. Well, u it's been over 270 days. It's been 281 days. Um and yet semiconductors and pharmaceuticals and pharmaceutical derivatives and semiconductor derivatives do not have any tariffs announced yet. Um maybe they're waiting to see where these end up. Maybe they want to see something else here. But I noticed the pharmaceutical one uh is certainly uh maybe top of mind for Americans that want to find cheaper drugs, cheaper medications. Um another one, the 232 furniture rates. This was something that was supposed to go be an increase on both the furniture and the vanities at the end of the year that was paused for an additional year. So we didn't see the 30% and 50% rates on furniture and vanities. We have to wait another year for those increases. are still stuck at the 25% as they were when they were first enacted. Now we have another a section 301 finding on Nicaragua. It did find that Nicaragua is cheating, has unfair trade practices, but it results in a 0% rate for one year and it exempts DRAFTA qualifying goods which many things imported from Nicaragua to the United States claim DRAFTA which is a free trade agreement. So, um, another further carve out, another way that yet again they're finding different ways to have one thing that they can put out there being very aggressive on trade and then finding ways underneath it to provide that

relief to consumers. A lot of apparel uh in the Western Hemisphere comes from Nicaragua. 232 inclusions on steel and aluminum also took longer. So the remember if you maybe recall that terrible weekend in August where on Friday at 4:00 they announced hey there's be 132 new tariff codes that are going to be effective by section 232 and those effective on Monday. Um the timeline between the first list of inclusions back in May to that August Monday was 109 days between okay what other things should we add to 232 steel and aluminum versus when they go into effect was 109 days. Well, we're over 120 days now. We're almost 120 days now on the second batch of inclusions for aluminum and steel. Meaning, are they going to take longer? trim down this list? Are they going to delay implementation here? One rumor I've heard out of DC is that they're actually looking to maybe trim the 232 in further ways um because of some of the obvious concerns that people have had. So, some people that had imported deodorant where the active ingredient is this aluminum zirconium antipersperent, they were flagged for 232 on aluminum and they're like, do I pay this? And one reading says yes, they should, but that's a little bit silly in some ways. So, maybe the administration wants to trim that down in a few other ways as well and create maybe create some sort of like dimminimous uh applicability for steel or aluminum. all the way around here, I think we start to see a very common trend that what we may see at the top is not what we actually get at the bottom. And so what we see for 2026, I want to put together a bit of a framework out here. And if you were fortunate enough to attend our Flexport Forward Conference in Los Angeles earlier this year, you heard me talk about there are four categories that Trump won in 2024 and that he's very sensitive to going forward when it comes to cost of living. gas and groceries, healthcare and housing. These are the four areas where he hammered the Biden Harris administration in his successful re-election campaign. And they are four areas where I think we continue to see progress from him, saying we're going to try to keep these things inexpensive. We've talked about annex 2 making beef cheaper. We're seeing pharmaceutical tariffs maybe not seeing the same amount. We're seeing [clears throat] housing not quite have the same level of 232 tariffs. Remember, only seven HTS codes at all for furniture were actually given this 232 teriff treatment, despite they could have included all sorts of things, wooden shelves, wooden bookcases. They could have done all sorts of different pieces of furniture, but they didn't. They only limited it to seven pieces, uh, seven HTS codes. [snorts] So, housing and furnishing, um, this seems to be another area where they don't really want to jack up those prices quite yet with the tariff cost. um gas. I don't know if you watched the news about Venezuela. It seems like the Trump administration is very interested in the petroleum reserves of Venezuela and perhaps how that could be used to lower the cost for American consumers as well. So, these four categories, I think, are a relevant lens for how to maybe view uh the Trump administration's agenda, especially when it comes around concerns of affordability. What else to maybe expect? Um USMCA renewal um that's supposed to be getting discussed through July. The decision may end up being no decision. Um, I think this is a very possible option. What they may decide to do is not terminate it, but it could just sort of limp on. They extend it. They find different administrative things to not make a hard decision one way or the other for two reasons. One, Mexico and Canada may want to wait for a more favorable Congress if they think the midterms are going to go poorly for the president. Secondly, um the Trump administration may also want to see what are the effects of the tariffs and what are the possible concessions maybe we can get out of Mark Carney who's been the much more firmly uh aggressive uh um you know negotiator in contrast to Mexico where Shinbal's been a little bit more agreeable, willing to work. Canada's been a little bit more forceful at the negotiation table in the USMCA. Um, so not to say it's going to go away, don't take that at any time at all, but just to say that there may not actually be like kind of one way or the other. It may just be a low simmering undercurrent across the year. Um, tariffs will continue, but I think as I've been saying here, I think they're going to be restrained compared to the rhetoric. The rhetoric is going to be hard and fast. Economic security is national security. Some of these key phrases that Trump has really founded his cornerstone agenda on. Um, and you know, whether or not AIPA continues or not, we'll find out in a couple slides here from Jen, but there's this whole tariff toolbox. I brought this up a few months ago here. Um, this is the tariff toolbox. There's a lot of things in there that could be getting used. 122, 232, 338. Um, the section 891 code, you know, provision of the tax code maybe that could be applied as well. There's a lot of different potential tools that could come out here even if I was defeated. So, they're going to continue, but it does seem like they're going to continue in a more restrained way than maybe what you might read in a news headline. And the final thing you should continue to expect is CBP enforcement is going to increase. We know that CBP officers all across the ports of entry have hired more auditors. Every, as far as I know

every single port of entry has more CBP auditing officers in desks. They've probably taken this year to kind of get used to it, but going forward, they're going to be looking for things to do even with a defeat, a potential defeat with the AIPA tariffs. Um, we're still going to see uh more audits from CBP to try to maximize that revenue that is actually owed to CBP. We're seeing the DOJ's white collar division, they said earlier this year, they're early in 2025, they're going to make trade fraud a priority. Seems like that's continuing. Right now, they're getting ramped up, but they're going to keep looking. you're going to keep finding more areas to pursue this as a revenue maximizing strategy and to make sure that enforcement of these new tariffs that Trump really values um is going to be strict uh and fair. Um so I would expect kind of all four of these main trends here. I hope that helps for what happens in 2026. But as for what happens maybe tomorrow um I'm going to ask for my colleague Jen to come on stage here talk a little bit about uh the AIPA tariff uh litigation and what we can maybe expect here. What are some of the if thens? — Thanks, Marcus. Hi, everyone. Um, so today I know we're going to be going over the IPA tariff litigation. We just wanted to kind of briefly go first start with the history of the litigation case. I know there's been a lot of cases that have been filed for in regards to IPA, but this slide is to mainly focus on the case that everyone has been following this year and we wanted to kind of highlight how quickly it's kind of come along from when it was filed at the court of international trade. So, just to kind of go back, April 2nd is when it was liberation day and the first case on the tariffs that we were filing the boss uh selections was filed on April 14. Shortly thereafter, there was a case learning resources that was filed actually in the district court for the District of Columbia. Um and then we know that in May and August the both the CIT and the federal circuit both confirmed that the IPA does not um authorize the imposition of tariffs. September 9th is when the boss elections case and the learning resources case. So the lead cases were consolidated so that they could be heard together um at the Supreme Court which was on November 5th. I think everyone was tuned in on that and afterwards the consensus was that a little bit more optimistic than we had gone into thinking that you know the justices would probably rule hopefully in favor that these tariffs were um unlawful. But more to come. I know there have been a lot of inquiries from clients asking, do you hear anything? When is the decision coming? Do you hear anything um in terms of timeline? What should we prepare? So, we'll kind of go over that in the next few slides. Um but we just wanted to kind of briefly highlight just kind of the litigation um history of what we're seeing today. And as Marcus alluded, tomorrow may be that day where we actually get some answers. Hopefully, I'm hoping we do because navigating the uncertainty is tough, but I'm sure everyone is on their toes waiting and just um every day week that goes by I know is excruciating for a lot of you. So, more to come. Um this slide is to kind of just highlight the if then scenario, what the Supreme Court rules and what the importers should anticipate based on those decisions. Um there could be more, but we just kind of highlight the main ones here. Um, I'd be surprised if there was something completely different that we find out tomorrow, but just wanted to go over how importers should be reacting or, you know, anticipating based on some of the decisions that we may anticipate. So, first, um, I believe this is the one that we do not want to hear is that the tariffs are in fact lawful, right? That the president did have the authority under IPA to implement these reciprocal um, IBA tariffs or the fentanyl tariffs. So um I think in this case there is nothing in terms of change. The IPA tariffs will stay in place. The tariffs will continue until any adjustments are made by any other executive orders. Um so what we would recommend for importers is you know you would want to consider adjusting your cost models, evaluating your supply chain or looking at other tariff mitigation options for your business. Um, hopefully you have been doing that for a while or you have been in the planning stages so that if these do not go away based on this decision that you do have a plan in place. But if not, I would suggest um putting some together um ASAP. Um so the second one is limited scope. So that doesn't mean that they're going away or that they're here to stay. It's more of that they may the Supreme Court may come back and say, "Hey, some of these tariffs are actually lawful. " Um so when during the oral arguments there they differentiated the two different types of IVA tariffs. One was really focused on fentanyl the national security aspect and then the other ones really focused on the reciprocal which is more of the economic revenue policy. So they kind of separated those two. So it is possible that with the national security concern

that Trump has been um pressed on that those may be deemed lawful by the justices. So those may stay whereas the others may not. So we might see kind of a split in terms of what tariffs will still be in place versus which will which may be deemed illegal. So for those there may be um a process that's you know announced in terms of how to get those respective refunds on the ones that are deemed to be um unlawful. Um but then you would still continue paying on the ones that are found to be lawful. The third one is um something that we have been hearing that the tariffs are unlawful. However, relief is only prospective. So not retroactive which means that there are no retroactive refunds which that means that however you cannot go back and ask for refunds from customs um to get back everything that you've paid to date. um for that we would say let's look out for a CBP um guidance you know the CSMS messages that you have been seeing but that will provide more clarity to the brokers itself in terms of what the instructions should be when they file for those um tariffs so that making sure that they're no longer on those entries but this is something that could potentially happen but um we're not sure I really hope this is not the case um but um this is one of the possible um outcomes. The last is I think or the fourth one that you see on there is something that I think everyone is hoping for which is that tariffs are in fact unlawful and that prospective and retroactive relief is provided. So this is that no tariffs apply going forward but also that importers have the ability to request refunds on all IPA tariffs that were paid. Um in this instance I know a lot of companies are asking what does that refund process look like? We will walk through that in the next slide. But um I don't foresee that the Supreme Court will provide detailed guidelines on what that refund process will like, whether it's going to be a protest, filing a suit at the CIT. Um I would assume that they would probably remand the case back down to lower courts and have the lower courts really flush that out. Um and what that means is for liquidated entries, whether a protest would be needed or whether a suit would need to be filed at the CIT under jurisdict 1580. um one I and for unlquidated entries whether post summary corrections would be the proper route. So um at this time we still don't know what that refund process will be if there is one. We still need to wait for more instructions on that. Um and the last one is a jurisdictional dismissal. Um as noted in the previous slide, there were two different cases that were brought in two different courts, right? one was at the court of international trade and I believe that learning solutions was at the district court for the district of uh Columbia. So um the Supreme Court could decide which court ultimately has jurisdiction over this case. I would assume it is the court of international trade and if so they may dismiss the um the one from the district court on the grounds that it lacks jurisdiction and they may need to refile or if you know there were other cases that were filed under the district courts those may need to be refiled. So that is something that we will be looking out for as well as part of the decision from the Supreme Court. All right. And then the next section we wanted to kind of go over how importers prepare to preserve rights to their potential refunds. I know this has been floated around from various industries in terms of how you can prepare to make sure that if the refunds are available that an importer is in a good situation to request those refunds. everything is prepared. But we do get questions on what does that all mean? Like how do I prepare? And they do have questions on you know different aspects of how the preparation should work. So I wanted to quickly kind of go over kind of our considerations that we pulled together and maybe clarify a few of these areas. Um the first is that we would recommend setting up an ACE portal account. Working with importers. I know ACE is not something a lot of importers are a fan of or even familiar with. So, if you don't have access to ACE or you're not accessing your ACE account, um I would recommend that you start setting that up and start utilizing the ACE account. ACE in general is just customs data for all of your import entries. So, in order for you to accurately assess what entries were impacted by the IPA tariffs, that's probably the best place to pull that report. So, you'll want to make sure that you have that ACE set up. But also another reason why you want ACE is because of the AC refund. Um recently, I think at the end of December, it was announced that it's going to be mandatory as of February 6th for everyone to be signed up for a refund. So I hope everyone is looking into that and getting that set up. And

basically that is um a direct deposit for any refunds from customs to an importer. We have a slide later on that kind of provides more um insight and guidance as to that process. So if you do download this the slide deck, you'll have that on hand as well. Um the third is identify entries on which IPA tariffs were paid. So all out of 2025 since that's when the scope um of IPA was in place, we would say start gathering all of that entry data. Pull a list together, figure out what entries have IPA tariffs on them and also see what is that impact. How much could you potentially anticipate in terms of an IPA refund? Um, like I mentioned, the best place to get it is in ACE, but also you could probably ask your broker to pull a report if they handle all of your entries. Um, but just having that readily available is probably great because if you do want to move forward with any corrections, at least now you have a full list of entries that you know need to be corrected. Um, one thing we also want to call out that's very important is reviewing your entry declarations for accuracy and identifying any issues that need corrections. So what we don't um what we don't recommend is that if the IPA refunds happen and you are filing these refunds via PSC or protest but there are information on your entry that are incorrect for example your value is not correct the classation is not correct there's other data elements that you believe are not accurate we would say this is the time to make sure every data point on your entry is correct especially if you're going to be filing any corrections with customs. Um, you don't want your IPA refund to be rejected or saying your PSC is deni denied because of a different issue. For example, your classation on a different item was incorrect. So, they denied the pro the PSC's. Now, you have to go through the protest route. So, you just want to make sure that when you're filing a correction that you've kind of done a due diligence check on your entry making and that you're confident that not only is the information correct, but let's say if you had section 232s on there and you had adjusted the derivative value count from percent down from 100 to let's say you got information from your vendor to let's say 40% or the weight in quantity is different. So like if you adjusted that down, do you have information to support that value that you're reporting to customs if customs does ask? You want to make sure you have all that readily available to. So if you don't have that, now is the time to kind of start gathering it because like customs mentioned, there is more CP enforcement. We do see that from clients receiving CF28s, 29s on their entries as where customs is asking for clarity on 232 values, on um classation value, all of the above. And we see that more today than before. So just in general, I would say if you um just have a sanity check in terms of making sure entry information is accurate, but also you have the necessary supporting documents to show um the that what you're reporting is true. And the lastly is probably the most important thing is monitoring liquidations on the entries for IPA tariffs. Um liquidation is generally the finality of your duties and tariffs. Um and so another question that we get or confusion is that they we do see uh companies thinking that the liquidation date is the actual entry date and I just want to clarify it is not. Entry date is different from liquidation. Liquidation date is generally around 314 days from the entry date and that's like when an entry closes like I said it's the finality. And so why this is important is that uh importers have about 180 days from the liquidation date to file a protest. Once that 180 days is over, um the remedy to contest the liquidation is gone. So you just don't want to miss that deadline which is why we always we are recommending pull that report identify your all your entries with IBA tariffs and also monitor the liquidations on each of those entries so you don't miss out on that deadline. All right, the last part what companies can do. Now, so we wanted to highlight this because there's a lot of confusion as to whether a company should be filing a protest or protective CIT action under uh jurisdiction 1581i. And so we do get a lot of inquiries saying we're hearing both. We're hearing we should do one or the other. We should do both. What does that even mean? So I wanted to kind of quickly highlight some clarity here, but it might also be a little bit more confusion. But um so in December 15th, there was a CIT case that kind of highlight a little bit more clarity on the procedural process of like the liquidation process. And I think that also kind of instigated some of the confusion as to why a protest may not be the only route or the route for a refund. And in that case, what the plaintiffs were asking is for a preliminary injunction to suspend the liquidation on their entries. So basically they're saying don't liquidate

any of my entries. Um keep them open because the remedy to contest the liquidation is not necessarily available under a protest. What does that mean? So they're saying that in this instance customs is ask is acting in a ministerial capacity this instance as in for the IPA tariffs. And so they're just collecting the revenue and based on precedent cases when customs acts in administerial capacity. So they're taking more of a passive um action as opposed to um an active role is that protest is not the right remedy to contest a liquidation that customs does not have the authority here to really decide on the legality constitutionality of the duties. So the pro since a protest is not the right remedy we would um like for our entries basically to stay open so that when this decision comes out we have the opportunity to request those refunds. Um in that case the court actually the CITA actually denied the preliminary injunction because the plaintiffs could not prove irreparable harm and that was because the court ultimately said we as CIT do have jurisdiction for the IPA tariffs under a different jurisdiction which is uh 1581i. The difference between 1581i and A is the route where you file a protest and then you go to the court if the protest is denied. 1581i is um kind of residual uh jurisdiction where any other trade cases kind of fall. And so what the court of international trade basically stated in that opinion is that the court of international trade does have jurisdiction under for these IVA tariffs um under 1581 I and that they do have the authority to issue refunds um based on a requidation. So they have the authority to reliquidate an entry to um to is to order refunds based on the Supreme Court decision. So um so it kind of goes against the whole plaintiff's argument that if the entries liquidate we have no remedy. Court is saying no even if the entries do liquidate I as a CIT court will have jurisdiction to order a reiquidation so that the importers can get their refunds in the scenario that the Supreme Court decides that the tariffs are unlawful. And so that's something that came out and I think that's why there was a whole discussion of so does that mean the protest is not the right remedy for this because IPA tariffs right now at the Supreme Court is a is an issue of the constitutionality of the duty um whether these are you know legal or not so this is not necessarily something in customs um authority and so customs is not playing an active role they're very passive and so what the CIT also said in their decision is that in those instances filing a protest is feudal. And so this kind of adds the confusion as to whether a protest is the right avenue or whether now [clears throat] a protective action under CIT jurisdiction I is the right one. And I think what we want to highlight is this is a decision from the CIT. It's not the decision from the Supreme Court. There is no official guidance saying that the protest is not the proper route at this time yet. Um so we can't say protest is not right. protective action is the right method um where you can just see what the courts are saying at the lower courts. And so I would say um if you're in a position that you can't file a protective action um pro you may want to file a protest at least if you're close to that protest deadline. Um I think that's the least that you can do. But also there is a third thing what you can do is really waiting for the Supreme Court decision. We do have companies that are deciding just to wait to see what's going to happen before they decide to file a protest or um a suit at the CIT only because a lot of their entries are not liquidating until a little bit later. So I know the first set of entries are liquidating probably January, February for those that entered in the earlier months of like March um April and so we do have about 1886 months from the January February liquidation date to make a decision. And with the potential Supreme Court decision coming out tomorrow, some companies have decided, let's hold off maybe until January, end of January to make that decision whether to file a protest or um a CIT um productive action. So, um I'm not sure if that added some confusion, but I just wanted to kind of highlight why there is so much discussion around what whether a protest or a um protective action under a C with the CIT is the proper route for these. All right. Um and as I mentioned before, this is just some um guidance on a CPA AC refund. We just wanted to advise everyone that this will be mandatory as of February 6th. So, if you have not done so already, please make sure that you have this on your task list to get it done before um this deadline. Um and then we wanted to provide some um information on how Flexport Trade Advisory Team can support during this time. We do have a lot of companies that

are reaching out for customs entry audit. Like I mentioned, one of the things that you should be doing in the interim as we wait for the Supreme Court decision is making sure that every data element on your entry is correct. and also it may be an opportunity to find some tariff um relief right so there were a lot of changes that happened um in regards to tariffs whether it's 232s the auto tariff stacking all of that and sometimes these were retroactive changes as well so if you haven't looked into it already you may be able to um not only identify areas where you may be exempt from these tariffs um based on intransit dates um but also you may be able to kind of um find areas where you make corrections um and get refunds on potentially let's say 232. In the beginning, you did not know what your steel value content was for the first few months and then you were able to work with your vendor and got that information later on. We do see a lot of companies filing corrections to correct those on those historical entries. Also, um there are issues with tariff stacking. Did you did a broker really consider tariff stacking when they were issuing all the various 99 codes on your entries? there may have been errors that may have been made. So, you just want it doesn't hurt to go back and check to make sure that the 99 codes were applied appropriately on each of the lines um and that they took into consideration the various stacking rules, but also um anything any other data points that you want to check for. Um the next section is just if you want us to assist with those corrections that you find on during the audit or you know if you want us to help file that protest for the IPA refunds. We don't know if it's the decision is coming out tomorrow or not, but if you're really close to that protest deadline or you just want to go ahead and file that protest, um, our team is more than happy to assist there as well. And then, like I mentioned, if it turns out that the tariffs are deemed legal or lawful, um, there are ways that you can potentially, you know, try to mitigate some of these tariffs or duties. um even if they are not, you know, just in general, if you're just looking for ways to kind of minimize the duty tariff impact, there may be instances where that um that are listed here that could apply to your supply chain or your uh business um to help kind of reduce um some of the financial impact that you are seeing today. And lastly, um how flexport in general, so not trade advisory but the flexport company um can help. Um, so the duty drawback analysis, I wanted to kind of highlight that. Um, if so, if your annual duty drawback claim exceeds $1 million, click the request drawback analysis button at the top. Um, we'll run a free um, detailed analysis using your ACE data. No new data is required and there's no obligation. Just report with um, the estimated recovery, eligibility map, and compliance check and action plan. So, we'll provide all that for you free of charge. Um, next is if you would like a complimentary uh customs analysis from Flexport, um, feel free to email the customs BD team here. Um, this is a great way to kind of identify potential duty savings, compliance risk, miscost um, saving opportunities, but also it's a great way to kind of showcase the different tariffs that you may have played historically. Um it shows you a great breakout of what's you've paid on IBA section 232's everything that's kind of come into play this year or last year I would say. Um also feel free to explore um and we encourage you to use our tariff simulator which I believe a lot of importers have found very helpful during this time. All right Marcus I think it's time for Q&A. I believe it is. — All right. I'll start with the first question for you. It says, — "Have you seen more audits verifications on those USMCA shipments? 84% is a big number. " — Yes, we are. Um I think another context to kind of like put this in perspective that 84% is from August. in May, three months before then, the number was like 50% and before that it was like 40%. So, USMCA is still very valuable. It's like one of the few ways that many products can actually still come in truly duty-free. There's not many free trade agreements out there that still kind of give that preference. USMCA is still one of those. So, yeah, what I think we're seeing is a mix of both um importers that maybe just never bothered really to go for it because maybe it was already, you know, the standard rate of duty was free. So all I have to pay is MPF, so I'm just going to pay it and just be done with it. Which maybe if you can't prove USMCA, that that's fine. But now with such a huge savings, 25% from Mexico, 35% from Canada for claiming USMCA, um there's a lot more value in claiming it. So I think it's pulled a lot more of those like marginal importers um from being like, well, maybe I'll claim it, maybe I won't to like, I'm just going to

claim it. And what I think that's going to lead to is a lot of unprepared importers. So, if you're not familiar with the USMCA process, what they're going to look for. Um, yes, they're going to ask you for it. We've been seeing more questions about a lot more actions from it. Um, and I expect to see that to continue. So, if you're not sure that you have all your ducks in a row, it'll be claiming USMCA. Be sure to reach out to us for that. Yep. — Yeah. Yeah, and just to add on that, I I've just seen in general for like CF28s, 29s when customs ask for proof or just documentation to vet the USMCA rule. I've had instances where companies said, I claim USMCA for years. Um, our, you know, factory or manufacturer overseas, we this is the process we set up for the past 5 years. We're very confident in it. But when it came to the documentation part, they could not supply anything. their manufacturer actually did not want to provide the documents that customs was requesting. So, customs just went ahead and actually rate advanced everything saying the USMC does not apply because you can't prove it. And so, you just don't want to be caught in that scenario. So, I agree with you. I think documentation um making sure you have your ducks in a row is going to be very important if you're claiming that USMCA. — Yep. — Okay. Where can I find the HTS codes for furniture that is possibly being hit by 232s? — Um, I can give you the HTS codes. There's only seven that has been hit by 232 already. As for like the prospective ones, ones that could be coming in the future, um, that's kind of my thesis is like I'm not quite sure what we'll see then yet. If they're going to pause the tariff increases on some wooden chairs and um, or some other wooden furniture and wooden vanities. Um, I'm not sure we'll see that. But I will add the seven codes into the chat um, for you though. But uh yeah uh possibly being hit by 232 in the future. Really the scope of the investigation was timber and lumber derivatives including furniture made from wood. So that would be a pretty expansive list if they go for the full breadth of that investigation. Um if not though it's uh right now it's just the it's pretty limited in scope. — Okay. — Let me add that to the chat here. Um okay. Um here's one uh here's one for you, Jen. Um, suppliers are proposing a switch to DDP and what appears to be an invitation to customs fraud. We declined. Excellent. Way to go, Marcus. Thumbs up. Uh, noting that everyone is switching. Is there any news on either increased customs enforcement or changes in non-resident importer regulations? I might also have a comment, but J, go ahead. Go first. — Yeah, I would love to hear a comment, but I think in general, I can probably answer the first part portion of whether there's increased customs enforment enforcement. I think in general all across anything there is increased customs enforcement on um entries. But have I seen more on value? Have I seen one on actually a DDP transaction? Yes. Um I would not recommend DDP unless you're very confident that you can prove your DDP value to customs. should they ask the you as in I know you're not responsible for the actual value and how that's um constructed, but you want to make sure that you're working with a partner or a vendor overseas that is going to be very transparent with you in terms of how that value is declared. We just recently had an instance where a client received a CF29 um or CF28 asking for information on their value. Um something looked a little off. So customs was asking for information on, you know, commercial invoice, their proof of payment, all of that. And it was actually a DDP transaction. The importer had no idea how to prove that the value, what the value included um and they were kind of at a loss um in terms of what to provide customs. And so one of the risks that we always called out for DDP is the lack of transparency in how the value is calculated. you don't know if your vendor or manufacturer that is you know acting as importer is actually declaring the right customs value right and these are your products your shipments that are going to be stopped and so you don't want to be in that scenario that's why I say DDP great but only if you are very confident with that relationship you trust your vendor you know exactly how the value is constructed is there an agreement in place that really outlines it for you I know it's not going to be black and white I know some vendors are not going to want to expose their value or their um cost to you but I would say um I also don't think a lot of importers are switching. I know in the beginning once the tariffs hit there was a lot of discussion of GDP and a lot of vendors and manufacturers overseas offering to change their inco terms to GDP to help relieve some of the trade um tariffs. But I do think we see it less. I do think there is more hesitation on switching and we do see from the customs side that they are looking at it because they know that companies are switching to GDP for this very purpose to relieve some of the tax burden or the tariff burden and so customs has caught on. They know that this is something that importers are doing. So we just um so from the customs standpoint enforcement standpoint yes it is increased. Um, in terms of changes to non-resident

importer regulations, I'm assuming that's what you're referring that you would want to touch on, Marcus. — Yeah. Yeah. And I mean, I think just to kind of also wrap up your point like with DDP, I think it was just kind of like a seemingly tempting thing, but the only way that DDP works like to actually save you money is if they're lowering the value of the underlying goods, which in theory shouldn't be happening. And like that's the only way that DD and I think you know our question asker um was right on like it was an invitation to customs fraud. The only way you save money in under a DDP scenario is if something fraudulent is happening. Either they're misdeclaring Kachio of origin, misdeclaring HTS, misdeclaring the value. In theory, no matter your incot terms in general, you know, in general, the value of your product probably shouldn't change. The HS shouldn't change. The country of origin shouldn't change no matter what your incoterm is. Um, so to kind of say like, oh, this is a saving strategy doesn't really work. And the other thing is here is like now if companies were saying like, oh wow, we got to watch out for this higher cost. we should switch to DDP. Well, if tomorrow brings good news, the Supreme Court comes thundering down the mountain and says universal refunds for everybody, well, that goes to your DDP imported record. So, even though you paid the higher price because of the tariffs and you ate some of that cost as a US recipient, um any of that refund now goes to the foreign DDP importer of record. So, another reason why that was maybe a short-sighted um understandable but perhaps short-sighted uh action to take, is there any kind of enforcement on this? There's a lot of chatter in DC about what to do with non-resident importers. Um they've been aware of this. There's been some questions about should we allow this? Not every country. In fact, I think it's only about three countries in the US. I think it's only Canada, Australia, and the United States are the only three countries that allow for non-resident companies to be importers of record into uh those countries. So, um that makes it kind of a very limited group. And I think people have been wondering, wait a minute, is this the right setup? So, uh, no announcements, no news. Um, but I guess I can confirm there's been chatter, there's been discussion. Uh, there've been there's been conversations about that point. — All right. — Excellence. For agricultural imports from India, are any IPA tariffs in effect today? And what's the best way to confirm applicability of HTS codes? — Uh, yes, there are. Um there are agricultural like there are some agricultural products that are exempted from the AIPA tariffs um mostly coming under the annex 2 and those annex 2 do extend to the other 25%. So remember India kind of has two 25% codes that are adding up to 50% right now. One is 25% AIPA reciprocal. The other is 25% because of India's purchases of Russian oil and petroleum products. Because of that um those have been adding up to 50%. But there are still exemptions under annex 2 for all of that 50%. So companies have been getting a break from that. And so depending on especially after the November expansion to annex 2, more products are if you have an HTS code that you want to confirm, the best place I would recommend is the Flexport tariff simulator at tariffs. flexport. com. Um, and that will have a lot of the options including toggles for whether or not you can claim any sort of other exemption. But yes, many of them are exempt. Um, some are not, but uh, take your HS code, take it to a terrace simulator. — Okay. — Um, here's some questions about ACE uh, ACE portal. Jen, you ready? — For you. Yeah. If I set up an ACE account now, will I still be able to see all my CBP entries from previous years? — Yeah, I would say yes. So, you can go back five years. Um, so that's a great look back as well, not only on 2025, but previous years, and you can kind of see like the trends of your import history. So, it's a great import footprint of your business. — Yep. Um, if I set up uh let's see, and if you have an ACE login for exports, does that also work for import data as well? — Uh, yeah. So if you set up a AC ace account, what they would what they ask is they must what um as the submitter needs to select is one business activity which becomes sub account. So if you were set up as the exporter, what you'll have to do is um go back in and add additional sub accounts types which could be importer, broker, exporter, carrier. So you could still add on to that particular account that you created. So yes. All right. So, another question on tariffs. Are all tariffs eligible for drawback? — Uh, no. Um, yeah, I need a chart for this to keep it handy. The IPA fentanyl ones are not eligible for drawback. Some of the IPA reciprocals are. 232s are not, but I want to say the 232 that was most recent, one of them I think did allow for some drawback under that, but I think for the

most part 232 is not allowed. um the IPA reciprocal I'm sorry the IPA fentinel were not allowed but the IPA reciprocal were um so I I'm pretty sure that was right I should get a chart together we should have that published but um yeah it is a bit of it's a bit of a mix so if you do have a specific question about certain tariffs you've been paying you have a drawback program set up um we can take a look at those — um Jen how about uh let's see how does extending liquidation or filing protests that may be a long time to resolution impact customs bond amounts. Does this run the risk of the bond becoming insufficient? — That's a good question. So, I think um one of the recommendations when the whole IPA tariffs hit was that you should request extensions on your liquidations. Um and one thing that Flexport had called out is before you do there are some considerations to that and we called out bonds. So, to answer the question, yes. If you are extending liquidations, have a protest that's open for a while, does it impact the bond that you have? Yes. Um, and in general, if you extend a the liquidation for your entries, it does increase the exposure of your bonds, right? The duration of your bond stays open until um the entries are liquidated. So, I would say yes, the answer to that question is yes. And so, that's something that you want to take into consideration. are you um do you want to have that exposure on your customers bonds? Do you want to be involved with the stacking potentially of bonds? Um and so you um that is I think one of the important aspects of why some companies did not choose to extend liquidations because the bonds was an important factor for them. And especially right now with all the um increases of tariffs, having to put down collateral after collateral to get those new updated bonds was just too much for some companies to handle. So yeah. All right. [clears throat] Flexport handles the vast majority of my import brokerage, but I have a few things that come in through other channels. If there is an opportunity to file a protest, can Flexport help me do this for all of my entries or just the ones that ran through Flexport? Um, so post entry corrections, protest, they all run through my team, the trade advisory team, and we can file it for both all flexport entries and non-flex port entries. So we can handle um for your for any entries that we have not cleared. Okay. — Oh, here's a good one for you. How long would it take for the government to do refunds if they are required to do so by the Supreme Court? I have heard the CIT protective action would result in a quicker payout than waiting for refunds. Is that true? That's what I hear too is that if you file a protective action um that you may have priority to get those refunds um as opposed to those who only filed a protest or who did not do anything. And so I think that's one of the reasons why some companies are choosing to file that protective action at the CIT is because they don't want to be at the bottom of the list in terms of receiving those refunds. Um I'm not sure if that is entirely true, but that's kind of what we're hearing as well. Um and but I think in general for a quicker payout if let's say we're talking about a protest the protest can be actioned up to two years right so that's going to take a while for a potential refund and so it is possible that going the CIT route may be quicker to get those refunds because a protest just takes longer two years um potentially two years it's not always two years it could be a lot quicker um I think in general for section 31 exclusions when that happened, we actually saw protests being um actioned within like 3 four weeks sometimes. So like I don't want to say it's going to take that full two years, but just knowing how protests work, the time that customs does have to review protest, it is possible that a CI action may be quicker, but I can't say for certain. Yeah. Is the ruling only for IPA or do you think it is going to be comprehensive including reciprocal and section 232 and others? So the current yeah Supreme Court case right now is on AIPA which includes the fentanyl and the reciprocals. Um it does not include the 232 tariffs. I don't think the Supreme Court is going to rule for this particular case on any 232s or any other tariffs that are not included. Um it is possible that the IPA tariffs I think the first the case that's at the Supreme Court only covers the five um cases right now. It does not include let's say the IP the reciprocal tariffs on let's say um India for importing Russian oil or you know some of the other tariffs — but is it possible that the Supreme

Court could rule that all AIPA in general even though it's not part of the initial case could be impacted it is possible but I don't think it could reach as far as saying 232s 301's or other tariffs that are not necessarily IPA related could be impacted yeah — I would also have to imagine you know say somebody does challenge the India or the Brazil case, right? Saying like, "Okay, these aren't the five that are subject being challenged, but all of a sudden your case looks really good. " If you were to try to appeal the, you know, the India AIPA, the 25% or the 40% in Brazil, um, if you were going to try to ask for relief on those, now it looks, you know, those look even less shaky and maybe the Supreme Court doesn't even want to hear those if there's been, you know, legal challenges there. So, — uh, that probably definitely helps. But yeah, 232 I mean it seems like that one in contrast, it seems like the main case that we're talking about, you know, for this case uh at the Supreme Court now is about whether AIPA provides specifically for the word tariffs like almost like a magic word. Section 232 does provide it does allow for tariffs um as a possible option. So that maybe uh there would have to be a different legal rationale there I think. Right. — I agree. — Yeah. Yeah. Um, what do we got? Maybe one more. — Sure. — Okay. Um, given that CBP knows what tariffs were paid in ACE in a very detailed manner, why would it be so hard for them to just issue refunds? They could pretty easily determine what importers paid and issue refunds quickly. Correct. Yes, they could. Um, uh, yes, they could. Um but I think that the issue here is though is as my take is that you know CBP reports up through Department of Homeland Security that's an executive agency and so if uh maybe this the Supreme Court does say yes these are illegal but if they're um their you know their opinion doesn't say you know CBP you are immediately directed to refund with as soon as possible all illegally collected you know tariffs if the ruling isn't that strong if they just say these are illegal importer, you figure it out. Or like you said, CIT, you sort through all the appeals here. We're going to have you deal with all these cases, but yes, the AIA terrorists are legal. Um, it could just mean that, you know, there's going to be a lot of tom foolery. I think, you know, when I talked about this back in November, I said that I think the Trump administration, if they do lose at the Supreme Court, they're going to be a sore loser. So whether that means that like they're going does that mean like oh yes we'll set up an office to issue IPA refunds and they staff it with one person right there could be all sorts of different kinds of malarkey where there's just different approaches to how are they actually going to sort through these refunds what are they going to look for apply really intense scrutiny to the documentation um unclear but it does seem like they're not going to want to just very quickly refund all this money very fast it's going to even So that yes, to the question asker, yes, they very much probably could do it very quickly if they wanted to, but they don't want to is was is my assumption. Yeah, — I agree with you there. I don't think they're going to make it easy. [clears throat] — Yeah. — To get those races. Yeah. — Yeah. Well, um I think with that, we're kind of here uh at time and so we're going to call that a day. Um and we'll all be watching very closely. If you want to, you can go to the Supreme Court website um and listen along live to their decision announcements tomorrow. Could just be a nothing burger. Remember that there's other cases they could be ruling on. They could just talk about some other administrative stuff. So, it's not a guarantee, but if you want to listen in, um I will be on the call listening, too. Um that's at uh I think it was 10 a. m. Eastern tomorrow. Um but uh thanks everybody. The documents, the slides, and everything will be sent after this here. Um but have a great rest of your day. Thanks for coming. Bye-bye. — Thank you.