Expeditors International of Washington, Inc. (EXPD) Earnings Call Transcript & Summary

Hello, everyone, and Happy New Year. My name is Nicole Gallanis, and I will be the host for the Antidumping and Countervailing Duty webinar today. With the webinar format, we will have about 45 minutes of presentation material and 15 minutes of Q&A at the end, if time allows. We hope to get to everyone's question. You'll see a Q&A window at the bottom of your screen. That's where you can enter any questions that you have throughout the presentation. And as mentioned, we will try and get all of them answered. But if we do not, we will definitely follow up with you after the webinar. We will be sharing a presentation after the webinar with you. The presentation that you're seeing today, you will receive that upon completion of a short feedback survey that I'll send out via e-mail after the webinar. So please wait for that. Before you get the presentation, you'll be able to fill that out, quick 5 questions, and then before closing out of that window, you'll be directed to the copy of the presentation, and you can save that and download it and refer back to it as needed. So with that, I will first quickly introduce our presenters today. We have Madeleine Veigel, Senior Director for Customs for the Americas; Ted Henderson, Senior Adviser for Customs for the Americas; Stephanie Holloway, Regional Manager for Customs for the Americas; and Sila Barr, Export Manager of our Customs Team for the United States. With that, I'll hand it over to Ted to get us started.

All right. Thank you, Nicole. And if you're just jumping on, once again, Happy New Year. We definitely appreciate you joining this Antidumping, Countervailing Duty Basics kind of webinar. I know we all have a lot of superstitions on how we start the New Year for good luck. Some people have black-eyed peas, maybe rice cakes, maybe you say white rabbits 3 times when you wake up in the morning. For us, in the Americas Customs team, we always start with a lighthearted webinar on something fun. And so we're doing antidumping, countervailing duties. So hopefully, this will bring good luck to all of us this year. We did host this webinar early last year as well. So hopefully, you had good luck then, too. But a lot of folks asked if we could revisit this since it is a priority [ trade issue ] for U.S. Customs and Border Protection. There certainly is still continuing a lot of focus on forced labor enforcement, things like that. But really, it is important to take a good look at antidumping, countervailing duty, and we'll definitely -- we'll talk about some things we talked about last year, and we're going to also provide a couple of updates that U.S. government agencies have released more towards the end of last year. So as a reminder, for the folks that are coming on, you will get a copy of this presentation in its entirety, sit back, take in the information, take notes as you wish, but you don't need to frantically screen print slides as we're moving along. So here's a quick view of what we're going to focus on in today's webinar. I want to say upfront that this is an AD/CVD Basics presentation. If this is new to you and then you're starting on your path, that hopefully will lead you to master the subject. Some of you have a very good grasp with this, and this is a reminder. But if you really -- if you think in terms of, say, college classes, this isn't even going to be AD/CVD 101. This is more like intro to AD/CVD. We're just going to hit the key points related to this important trade remedy. Our goal with the webinar is really to try to inform you and educate you on the key points of this trade remedy, and you can hopefully better meet your own responsibility as an importer. And hopefully, this helps support your own conversations with U.S. Customs and Border Protection or even us as your customs broker. We're not going to be able to really get into real detail during this 60 minutes. So I just -- I really have no doubt that someone along the way is going to ask a question about, hey, can you tell me if my product is subject to antidumping duties, we're not going to be able to get there. We're not going to be able to get that specific. But hopefully, again, we're going to arm you with enough information that you can come to your own conclusion. So again, we do hope that you'll find this presentation to be useful and informative. And thanks again for joining. So let's kind of get going on things here. So we're going to start with the concept of antidumping, countervailing duty. So we're all involved in business in one way or the other, either as an importer, exporter, in our case, customs broker, freight forwarder. But we know in business, we're always trying to find that competitive advantage in our respective markets. Unfortunately, sometimes folks might look for opportunities to find an unfair advantage in the marketplace. And that's really what this discussion is about today. It's about folks that have made a decision to try to import goods into the United States at an unfair low price. And there are dedicated members of U.S. government agencies that look very hard at this specific area. There are several government agencies that have oversight of all matters related to goods being imported into the U.S. at unfair low prices related to either dumping or subsidization, and that's really kind of what we'll start with here is the formalized process that government agencies in the U.S. use to determine if there is indeed antidumping, countervailing duty. The AD/CVD process starts with an allegation or a belief by someone that certain goods are being sold in the U.S. at unfairly set low prices, that they don't reflect the true cost of manufacture and sale of the goods. This allegation can come from the private sector, from several entities within the private sector, people who feel they're being harmed by these actions. It can also come from certain U.S. government agencies. And to be clear, there are very clear definitions of what an unfair low pricing means. We'll get into that a little bit during the webinar, but this is all formalized in U.S. statute and regulation. So it's not very subjective. It's a very -- a pretty clear guideline on how the government goes on this. The initial allegation generally causes an investigation to be opened by the government, and the goal of that investigation is to determine 2 things. First, are the goods, in fact, being sold in the U.S. at unfair low prices? And second, is there a U.S. industry that is being harmed by these low-cost imports? The investigation follows a prescribed course. We'll definitely lay that out a little later as we go to. Ultimately, from the investigation comes a result, and that result generally goes in 1 of 2 different ways. First, maybe the government determines that based on the investigation, the case is going to be terminated because the goods are not being sold at less than fair value or a local U.S. industry is not being harmed or second, there is a finding that indeed the allegations are true, and the U.S. industry is being harmed. And so consequently, there will be additional duties that the government will assess against those specific types of imports. The goal is to level the playing field for the impacted U.S. companies. The idea is that a U.S. manufacturer and a U.S. importer of the same goods are essentially in a similar cost structure and can compete relatively equally in the marketplace. Those duties that ultimately get assessed to the level the playing field, those are antidumping or countervailing duties. All right. So let's talk a second about antidumping, countervailing duty, and the acronyms that we'll be using in the course of this discussion. When we say ADD, we're talking about antidumping duty, and CVD is countervailing duty. Both of those are different items that we'll explain. If we just blend it together and typically from the government, we hear them converse about AD/CVD. We're talking either antidumping, countervailing duties, and it's kind of a blend of both of the 2 concepts. So one of the things we like to highlight is why this is so important. Why does anyone care about antidumping, particularly from a U.S. government perspective. So I'll just kind of lead you with a brief story here about why it is important to the government. And really, that story revolves around the U.S. television industry or actually more accurately what was the U.S. television industry. For those of us who are old enough, who can remember, in the 1960s and '70s, the American television manufacturers really ruled the industry globally. Brand names that were so common were Zenith and Philco and Sylvania, Emerson, Motorola, GE, RCA, you name it. There were a number of U.S. manufacturers that were the preeminent brands that were found in every household in the U.S. and are really around the globe. But without really getting into -- we'll get into a little detail here, but not the whole sort of detail. But basically a very small group of Japanese television manufacturers were basically able to completely replace those U.S. manufacturers in a relatively short period of time, about 15 years. One of the tools, if you will, that those Japanese manufacturers used was dumping televisions into the U.S. market at unfair low prices. There were actually a whole bunch of other numerous mechanisms, you can do an Internet search and read more about this. They did a number of things to monopolize the global TV market. They actually formed their own cartel, did price fix sitting in their home market in Japan, managed to get tariff barriers in place into Japan, which made it virtually impossible because of the tariffs to import goods -- TVs from outside, even theft of intellectual property rights. And really, at the end of the day, it was the dumping of TVs into the U.S. market that caused a big problem, and they used that classic dual-invoicing screen -- scheme rather. There was an invoice that was submitted for customs purposes that did not reflect the actual invoice price of the transaction. So when this was all said and done, as it was kicking up in the 1960s, as it was going, the actions really basically decimated the U.S. television industry. You'll see -- if you research this, you'll see numbers that really show that U.S. jobs in the TV industry declined by 50% in just 4 years, from 1966 to 1970. Then if you look at another 4-year period, another 30% jobs were gone. And really, by 1981, the industry was pretty well gone. Somebody did actually make a claim to the U.S. government back in 1968, that TVs were being dumped into the U.S. at unfairly low prices. But unfortunately, it took the treasury department almost 3 years to even do the investigation. And then after that, it took many more years to even ultimately level or to assess leveling duties, antidumping, countervailing duties and by then, it was too late. The U.S. TV and the TV parts industry was gone. And if you think about it as we move forward, those same players couldn't -- didn't end up competing in VCR, DVD, video gaming, streaming, et cetera, all of that could have been available to U.S. company. So the significance of that single action really is not lost -- was not lost on U.S. government agencies and on the U.S. Congress. So going forward, really from about the 1980s to today, we see a very concerted effort from the U.S. Department of Commerce, Treasury, Homeland Security, and we also see a lot of activity from U.S. Congress on the idea of managing and enforcing antidumping, countervailing duty actions and looking out for evasion. So let's take a quick look at the trade landscape on this, a couple, about 4 key points here. Number one, this is a priority trade issue. This is 1 of 8 high-risk areas for U.S. Customs and Border Protection. They're not the ones that do the investigation or even determine the duty that should be paid on to level the playing field, but their role is to detect and deter circumvention and make sure people that are importing goods that are subject to AD/CVD are paying the appropriate amount of duty, and Congress annually and the Government Accounting Accountability Office, all take a hard look at CBP in this particular area and provide a lot of their own investigation to see that the agency is doing the right thing. So that's their part. Speaking of Congress, the Trade Facilitation and Trade Enforcement Act was passed in 2015, signed by President Obama in 2016. This had a whole section focused on antidumping, countervailing duty enforcement because again, Congress is genuinely concerned about this. They're trying to protect U.S. manufacturers and U.S. workers. And as we're going into an election year, we're going to hear a lot about protecting U.S. workers and manufacturers, et cetera. So again, the focus is going to be making sure from a government perspective that antidumping, countervailing duty is part of the enforcement action they're taking. This really is the original trade remedy. We all know, by and large, about Section 301, trade remedy tariffs for China, Section 232, steel goods, things along that line. But antidumping is a trade remedy this AD/CVD enforcement is the kind of the original trade remedy. So this is a similar line of what we see in other areas. And then you have a quick shot of that graph. Unfortunately, we don't have a more current view of -- from the WTO of what's been going on. But even if you look at this period from 1994 to 2018, you see a shift from about 200 cases to 2,000 cases. And we're seeing this still to this day. It feels like every week there's news about a new allegation and an investigation that's going on or finding related to antidumping. So without belaboring this too much, hopefully, you can understand why the matter is important to both the U.S. government as agencies and then Congress and the President as it goes. And consequently, it's important for all of us and the trade community. It's important for us as a customs broker, as your trade partner and certainly for you as importers. And again, this is a global thing too, so you need to be cognizant of these things around the globe. So this really is at the forefront for us, and we need to continue to focus on it. All right. Madeleine, next to you, please.

Okay. Thank you so much, Ted. All right. So we'll go a little bit deeper into both antidumping and countervailing duties. So what is dumping, right? What is dumping exactly? So this is when a product, simplest way, product is manufactured overseas, the product is then exported and it's imported into the United States, and it is sold for less than fair market value. So the same product that is maybe produced in the United States cannot be sold and cannot compete. The domestic manufacturer cannot compete with the foreign manufacturers product because the foreign manufacturer is literally dumping his product here in the U.S. for less than fair market value. So domestic industry cannot compete. So -- and again, foreign producers, they're selling their products at less than the cost of production. So that really is -- they're literally dumping the product here in the U.S. And antidumping has been going on for a long time. It starts -- I mean it goes back to the late 1700s, it continues on in the 1800s with cotton, in particular, cotton was being dumped here in the U.S., and then really the government formally enacted the Antidumping Act of 1921, and that's when the U.S. government said, hey, we have to do something about this. These products being dumped here in the United States, our domestic manufacturers cannot compete, so we need to look at levying an additional tariff or tax on these foreign goods. This isn't fair. This is not fair for domestic industry, domestic industry can't compete. And a lot of the more popular antidumping cases, many of you, I'm sure so many of you know and see them, ball bearings, wooden bedroom furniture, garlic, raw honey, we'll even look at some, I think, raw honey examples later on in the presentation. But those are just some common antidumping cases that have been around for quite a while. So that is dumping. So if we look at the other, and we can move on to the -- yes, what is a subsidy or looking at subsidization, which is a hard word to say, we're looking at countervailing duties. And really, the only difference there is you still have a foreign manufacturer producing a product, they're exporting the product to the United States, the product is imported into the U.S., again for less than fair market value. So the domestic manufacturer for that same product cannot compete. But the big difference is that the foreign manufacturer can sell the product for a lower price here in the U.S. because they are being subsidized by their government. So at the origin, they're being -- they're -- that foreign manufacturer, their government is subsidizing them in a variety, maybe in different ways, and this allows that foreign manufacturer to sell the goods in the United States for less than fair market value. Some of examples of subsidies would be a direct cash payment. So they're being paid directly that foreign manufacturer by their government or they're being credited on taxes or they're being given very, very favorable loans, and that's how they're able to bring down that price. For countervailing duty to be countervailing duty, it's got to be specific to a certain enterprise or industry or region. It also has to be contingent upon being exported out of that country. But not all subsidies are countervailing subsidies. So in other words, a foreign government or government that is financing infrastructure within a country or providing some type of public education in relation maybe to that product that is being manufactured, that is not considered a subsidy, so would not be considered a countervailing duty. And then countervailing duties also -- the U.S. became stricter on that, that there were issues with all kinds of goods being subsidized in the 1800s, up into the early 1900s, and it was in 1922 when Congress expanded the countervailing duty provision, which then again, looked at adding an additional tariff to any goods that are again being imported into the United States for less than fair market value because the goods -- the manufacturers being subsidized at the -- or at the origin. So in a nutshell, that is antidumping and countervailing. So who are some of the players involved. And there are lots of -- what gets a little bit confusing about or at least I feel gets confusing about antidumping and countervailing duties are all the different government agencies that are involved and what is their role? So how antidumping and countervailing duties get -- or formalized or how they originate is -- and Ted mentioned this earlier in the presentation, it starts with a petition. So usually, it is domestic industry. It's a domestic industry group that will come together, just like in the garlic example, the garlic industry, U.S. garlic domestic industry came together and said, hey, we think something -- we can't sell our product here in the U.S. because we're being undercut by foreign companies that are coming in here and selling at less than fair market value. So they'll file a petition and they'll have to file a petition with 2 agencies, the U.S. ITC, which is the U.S. International Trade Commission, and also the ITA, the International Trade Administration, which is part of the Department of Commerce. So those 2 agencies will get the petition. And they focus on different areas. So the International Trade Administration, part of the Department of Commerce, they will initiate the investigation, do a first look at that investigation or first look at that petition and will start off the investigation. They will actually determine is this dumping or is this a subsidy or maybe it's both, and then they will determine exactly how much additional duty would be assessed and they will set the scope, all the products that are included within the scope. The U.S. International Trade Commission, the U.S. ITC, they'll determine if there's an actual risk, a current risk to U.S. industry and is there a future risk to U.S. industry. And both the ITA and the U.S. ITC, they do -- they make a preliminary determination and they will make a final determination. And my colleague, Stephanie will be talking about sort of the back and forth between these agencies because it's literally kind of a back and forth. We've said in the past, it's almost like a ping-pong match because they -- one agency will determine one thing and then take it over to the other agency and then they'll kick it back. So it's a back and forth between the ITA and the U.S. ITC. For it's -- a formal case is put into place with a formal scope and the duty amount. And then, of course, U.S. Customs and Border Protection, they're responsible just to, as Ted mentioned earlier, to enforce the antidumping, countervailing duty laws. So there they're just -- they're the enforcement arm. They're just making sure that once that scope and case is out there and the duties are out there, that they are U.S. Customs and Border Protection, CBP, is collecting those duties. And they have a lot of pressure, to which there's a lot of pressure that comes from Congress to ensure that they are collecting all the antidumping and countervailing duties. And there are many times when CBP gets called up to the hill and they have to explain the current state of affairs and whether they're collecting all the antidumping and countervailing duties. So that's why a lot of focus on ensuring that the duties are collected. So I will now hand it off to my colleague, Stephanie, to walk you through this back and forth with the different agencies.

Thank you, Madeleine. Okay. So we are going to show this visually, how a case comes to be, and I'm going to touch on essentially in that top left-hand corner of your screen, you can see the different colors and who the players are, and Madeleine just introduced them. So let's get into this. Essentially, how a case can get kicked off is 2 ways. It can be self-initiated by the ITA, but the most common way is that the U.S. domestic industry files a petition with the ITA in the U.S. ITC, okay? At that point, it kicks over to these 2 organizations. And remember that each have a distinct thing that they're looking at. The ITA is trying to see, is dumping and subsidization actually occurring, and the U.S. ITC is trying to see is local domestic markets being part, okay? Thinking about that TV example is super helpful. So ITA will say, yes, we want to pick up this case. And I learned in a different webinar, actually about 80% get picked up. So the chances of it being picked up and looked at by the ITA is very high. At that point, it goes over to the U.S. ITC. This is that first kind of transfer in the ping-pong match. So the U.S. ITC will look at it, and they will make a preliminary injury determination. So they are saying, is U.S. domestic markets being harmed by this. And they have to make a choice there. And if they say, hey, we looked at it, the U.S. domestic industry is not being harmed. At that point, there's kind of an off-ramp. And in the case is not pursued. If they do feel that it is being harmed, it gets bounced back to the ITA, and they're going to now make a preliminary determination. And of course, their preliminary determination is whether or not subsidization or dumping is actually occurring. At that point, they're going to make an affirmative or negative. It doesn't matter which one they make. It will still go to them to make a final determination. But one of the questions in the box was, when does custom start collecting duties? It's actually at this point, which I think is very shocking to a lot of people. But if you think back to Ted's example, they want to start collecting duties on this as quick as possible in this process, right? So at this point, if the U.S. ITC and their preliminary decision has said, yes, U.S. domestic industry is being harmed and the ITA says, yes, preliminarily, we think that dumping or subsidization is happening. At that point, customs is then instructed to suspend liquidation and to start collecting AD/CVD duties, okay? If there's a negative choice from the ITA, duties are collected, but it still goes to the ITA to make a final determination, okay? So once the ITA makes a final determination because now it's kind of bounced back within their own house, if it's an affirmative, then if duties weren't already being collected, they'll start being collected. If it's a negative, then it will end the case -- the investigation will end and any duties that were collected in that previous step will be refunded, okay? If not, though, it goes back to U.S. ITC. So now they have to make a final determination. So now you can see both U.S. ITC has had to make a preliminary and a final, same as the ITA, okay? If the U.S. ITA or U.S. ITC says, we actually don't find that the domestic industry is being harmed, it will end. And of course, any duties being collected will get refunded. But if they do confirm it, that actual AD/CVD order will be issued, okay? This process, this kind of life cycle really is just the very beginning of an antidumping, countervailing order or case that's opened. There's in this darker gray box in the bottom left, you can see other parts that will continue to get reviewed on an annual or on a regular basis to make sure that both what the ITA finds and the U.S. ITC finds is continues to be true, right? So they both have to look at this on an ongoing basis. So really old cases, like the honey, like ball bearings, like pencils, garlic, all of those are still being reviewed actively by the ITA and U.S. ITC to make sure the 2 areas that they're responsible for continue to be true. Okay? Additionally, with all these steps, they don't get to take forever. They have set timeframes. Really going back to what Ted spoke about, they need to make this happen and they need to make it happen quickly so that no domestic industry can be hard, right? So all together, this is about 287 days that it can take the whole process, which is a long time. That's obviously a little less than a year. We can all do math. But there is a lot of steps through this, okay? You see customs here represented both on collecting duties, but I want it launching a little bit more to what customs does because as brokers and importers, that's who we usually interact with through this antidumping process or inquiries. So let's look at what they're doing besides just collecting the duties. One of the things that I think customs has really upped their game on in the last couple of years is trying to help provide visibility to antidumping, countervailing cases, okay? So a big part that Ted helped establish in the beginning is that these cases continue to expand, and we're dealing with more and more, and customs is really using a couple of different tools to help give visibility. The first one is their CSMS messaging. They often will promote and help say that cases are being looked at. And as an importer, it is really important. If you are going to be impacted from a case, you really need to be participating within that process, this process here, if you want to maintain some of your legal rights. I am definitely not a trade lawyer, but if there's a case that's going to really impact you participating in this process and partnering with a legal trade attorney would be very important for you to do. So they help put those cases out there. There's a link here when you get the [ preso ] that you can click on and subscribe to their CSMS messaging, okay? They also have a search tool, I'm going to show you in the ACE portal. And one big piece I want to highlight is actually this top line, that they started sending warning messages to brokers when we submit entries on potential -- how would I say, potential -- I don't want to say mistakes, but things that they think might be a little out of sync. So this is relatively new. Expeditors actually had the privilege of partnering with customs on this project. They call it project Harvest. But what it does is it looks at the AD/CVD information that's being submitted by the broker and says, does this make sense. They look at the manufacturer we submitted and tries to make sure that it's in line with the actual case. It will give us messaging back if they feel like, hey, you submitted antidumping, but maybe there should be countervailing and vice versa. That helps the broker work with the importer to make sure that the right information is on file within that 10-day window. So that post entry and other things don't need to be done. So it's a really great tool and it's -- we're really lucky that customs put effort into providing that upfront messaging. So that link is also worth looking at because it describes that a little bit better. In addition to visibility, customs is also collecting duties, of course, they're suspending and managing entry liquidation. So somebody put a question in the box about, hey, I think an entry can stay open or it doesn't get closed up and additional duties might be due in the future. That is true. So customs, when you follow antidumping entry, I always this example about entry liquidation, but customs has just under a year usually to look at an entry and say, hey, do we agree with this? Once it liquidates, essentially closes the book on entry and doesn't leave it open. For antidumping though, they specifically leave that book open for longer and can keep it extended. So what that does is creates more, I guess, not vulnerability, but more variability, more risk within the importer because additional duties might be collected even a couple of years after an item is imported, which, of course, all of you guys know, the product is sold and long gone. They're also monitoring bond efficiency. So when you have a bond, you have to account for antidumping duties and of course, that just add more duties to the amount that your company likely is going to owe customs and you need to make sure that your bond covers that. They also monitor non-reimbursement statements, and Sila's going to touch on that a little bit more. And of course, they're communicating with you guys if they have more information that they need. So let's launch in real quick. This is the ACE portal. And hopefully, you guys all have access to your ACE portal and that you are using that as it makes sense. This is what customs is calling their modernized portal or their new work portal. But there's -- under references, there's an AD/CVD section, and we're just going to look at an example here. So these are twist ties, right? These little -- I always say those things that you always need that you can't find, but otherwise, you just find them all over your house probably, if you're like me. So we have twist ties here, and this is an antidumping case. And if you pull it up, you see these dates here. And hopefully, now these dates don't seem as intimidating are out there. So starting at the bottom and reading up, you can see, hey, it was initiated. The prelim was made by the ITC, then the prelim was made by the DOC. They use Department of Commerce, right? That's just the mothership of the ITA, but you can see that back and forth. And you can follow it all the way up to the affirmative. You can see the determinations there, whether they were affirmative or negative up to that final order being issued. And I think when I did the back, this was about 15 days short of that time frame that they have. So it usually will take about the full amount of time. But hopefully, now this is a little bit more demystified for you, and you can track what's happening. So here's my little quiz question for you. I don't have a way to talk to answers. But looking at this, when would custom start collecting duties? That was my really deep pause, like I'm a teacher and you guys are responding. But hopefully, your answer was December 10, 2020. It's this -- both organizations, both ITA and ITC have made their first affirmative. At that point, customs would start collecting duties. And that's really important to know as an importer. This nomenclature at the top for the CBP case, I'm going to dive into that a little bit more because if you're really new to the industry, this numbering sequence probably doesn't make much sense, and it's actually pretty easy to determine. So let's jump to this slide. This is the twist ties antidumping case number. So the antidumping will always start with an A, countervailing will always start with a C, okay? The next 3 digits, the 570 is the country code. So 570 is China, but Italy has their own country code, Vietnam has their own country code, et cetera, okay? The commodity code. So this case 131 is twist ties and then the other commodities that we know, ball bearings, candles, tissue paper, all of those, they all have their own commodity code. And then the last one is the manufacturer exporter specific code. So there's always a general code that's issued for an antidumping or countervailing case. It ends in 000, and we call that the countrywide rate or all company rates. And then individual companies can work with the ITA to help show that, hey, they're not dumping, maybe they have proof to show that they're -- in their -- I don't know how they do it. But either way, they can work with ITA to help show them that they're not dumping and they might get a different rate. So let's look at that example in twist ties. So in that golden box, you can see that all country rate or all other companies. So that's that one that ends in 000, okay? So for twist ties, if you're buying from a company that's not listed here, so you can see 2 listed Rongfa Plastics and Tianjin [ Kiyo ] packaging supplies. If you're buying twist ties and you're not buying them from one of those two companies, you're going to use the 000 rate which, if you go over to the far right, second column in, your antidumping rate would be 62.42%, okay? But if you are buying from Rongfa Plastics or Tianjin Kiyo's packaging supplies, you would use that specific rate. In this situation, all of the rates are the same, but in many antidumping or countervailing situations, the rates for specific manufacturers and exporters can be different. They're usually less than the general rate. But you always need to use the rate that is specific to who you are buying from, okay? A little fun fact. So twist ties, I did the math to see how much you would be paying in duty. So you would have your antidumping, which is 62.42%; countervailing, which is 111.96% plus your normal duty rate, and you would have Section 301 duties. I think the total duty between all of these additional duties and your standard duty rate would be over 200%. I think it was like 201%. So really, that's wild, right? Lots going on there. The other thing on the ACE portal that's super helpful is that they have the list of HS numbers that would be associated with an antidumping case. For this situation, for twist ties, there's a number here -- a number of them here. It is not an all-inclusive list. So some items, like a pencil, that has a really specific HS list, that is pretty clean, something like aluminum extrusions that hit so many different HS numbers. That list is not as clean. Either way, this list of HS numbers that they flag or tag is just to help brokers and importers have an idea. It's not all inclusive. And you are still responsible for antidumping duties even if your product is not classified as one of these HS numbers, but it falls in the scope. And Sila's going to talk to you about what the scope looks like. So I think I'm going to pop it back over to you, Sila, and you can talk about how do you know it's antidumping or countervailing applies to the commodity that you are importing.

Awesome. Thanks, Stephanie. So as usual, I'm probably going to have to rush through some of these slides because we're getting already very near the end of our time, and I want to make sure we have time for questions. But one of the things that I'm going to touch on is some things that we suggest that you do to help determine if your items are subject to a particular scope of an AD or CVD case. And then what you should do potentially with that information once you get it. So Steph, if you want to go ahead and advance us through? So the first thing to look at is determining what cases are potentially on the table for your particular HTS codes or your particular commodities that you're importing. So there's a few ways that you can get this data. The first thing is you can use the ACE portal. We do have a flyer posted on our external website, Expeditors.com. We have a whole page there about antidumping and countervailing duty resources that Ted's going to touch on in a little bit. We do have a flyer that details how to get to this information in the ACE portal and how to utilize that. Another option you might be able to do is utilize your customs broker for this information. I can't speak for all of them, but for Expeditors, if you are a customer with us, we can actually take your parts database if we have one of those with all of your HTS codes you used to import, or we could run a historical report on entries you've previously filed to get the HTS numbers, and we can actually run a query of that information to try to get the potential antidumping or countervailing duty cases that might be associated with those HTS codes in ABI. So that's another thing that you could do. The third thing you could do is work with a trade consultant. Again, you're going to want to be able to provide them with a list of your commodities or HTS codes that you commonly use, but they would equally be equipped to be able to help you pinpoint what potential anti-dumping or countervailing duty cases apply to your particular imports. The next thing you want to do is locate the scope. So once you have figured out potentially what cases you need to be looking at, you need to figure out what do these cases actually apply to in a detailed fashion. So one of the best ways that we have found to get scope information is go directly to this website, access.trade.gov. This is an official website that's hosted by the International Trade Administration, which we've touched on as part of this process earlier in the presentation. You'll be taken to a page that requires you to log in or looks like it. You don't actually have to log in or create an account at this website to access the antidumping and countervailing duty functionality. So you'll see on the left-hand side of the screenshot, there's a menu with antidumping, countervailing duty search as an option. So you would actually just click that. And Steph, if you can go to the next slide, and you'll be brought to a search screen. So this is the place where you would start looking up your commodity information, your case information. You'll see here, we've actually searched by the name of a commodity, honey. You can type in an HS code. I've tried putting in periods or not periods, and it takes it. You can search by a particular antidumping or countervailing duty case, if you have it. And we've made a note here that if you just want to look at how they're formatting them here, there's a dash in between each set. So it's 8-570-863, just something to keep in mind if you're having issues with your search. But there's multiple ways to search, and what you -- once you get your list of results, you can narrow it down as appropriate, either by country of origin exports, by particular HTS numbers, et cetera. There's lots of ways you can do that. So once you find the country or the case that's appropriate for the commodity and the country of export and/or import -- or excuse me, and/or manufacturer that you're looking at, you want to go ahead and click on that case, and it will bring up a very nice looking page of information for you. At the top will be upcoming announcements. I'm not 1,000% sure, I don't know what displays there, but I believe it might be additional status information, especially for cases that are still in the works of their investigation. There might be additional information posted there. You'll also see any potential HTS numbers listed which is great information to have as a guide, and I'll touch on that in just a second. But really what you're looking for from this website, that kind of the meat and potatoes that you want to take is the scope. The scope of the order is really important because that's going to give you all of the details that you need in order to figure out what commodities the government is concerned about with this particular case, okay? And there's a whole description. Again, the HTS codes are listed within the scope as well. But really, what you want is the full description of those items. So once you have the scope information, you need to then determine if this applies to your particular commodities. So the first thing to do would be try to understand the scope. Some are going to be way less complicated than others, right? One like honey might be a little bit less difficult than other things, such as aluminum extrusion, starts to get a little bit more complicated. Photovoltaic cells start to get a little more complicated, right? It just depends on what the commodity is and ultimately, it depends on what the U.S. industry kind of applied for the U.S. government to investigate, but you want to try to start understanding that scope. The scope will usually clarify exactly what is covered within the scope of that particular case. The scope may also include information on items that are excluded specifically from that case. So it's good to make sure you're looking for both of those and how those might apply to your particular product. If it's a more complicated case and even after reading the scope, which might be in a little bit more of a governmental language, I'll say, and you're still confused, the next step you could do is try to get more information on your products. If you have suppliers that you're getting your products from or if you work with particular manufacturers, you might want to get additional specifications from those companies on the items. You might want to bring in experts, right? If you have engineers that are designing these products, that have intimate knowledge about the specifications of these items. You may want to talk to your buyers, your vendors, bring in a trade lawyer, they can obviously help as well bring in experts, bring in help. And if all else fails, you can actually request a scope ruling from the ITA. Ted's going to cover -- we have a link at the end of this presentation with instructions on how you can do that, but you can actually send all of your detailed information into the ITA, and they can help you determine whether or not your item falls within the scope of a particular case, okay. So once you have the scope and you've done an analysis on your items, you will hopefully have a determination that either your items fall within the scope of a particular case or they don't. If they do fall within the scope, one of the first things you'll probably want to do is evaluate your customs bond. I'm not going to get into this in too much detail, but as an importer into the United States, most of you would have a custodial -- excuse me, a continuous bond on file with U.S. Customs. That basically allows you to import your goods, and it's kind of like a mini insurance policy between you and customs. When you're talking about adding in products that are subject to an antidumping or countervailing duty case, your total duty amount would increase. And the bond amounts, since they're based on a percentage of your overall duties, taxes and fees within a year, that's going to increase if you have items being imported that are subject to a case and whether it's antidumping or countervailing. So you may need to look at your bond amount and make sure that you have enough coverage to cover the items imported under the case or you might need to get a subsequent bond to increase the amount to cover those. If you have a countervailing duty case, provide that case number to your customs broker. If you have an antidumping duty case, provide that case number to your customs broker. If you have both, provide both of them. If there's multiple, provide all of them. Your customers broker is going to want all of the information for all of the cases that apply to your particular commodities. If any of your goods are subject to antidumping specifically, you also need to provide a certificate of non-reimbursement or non-reimbursement statement. This is a statement that is required, specifically in the antidumping space and basically lets customs know that you have -- you don't have any kind of side agreements with your suppliers or with your buyers overseas, that you're going to essentially kick back any cost or duties to them to kind of help subsidize their production of it. It's basically just to make sure that, hey, we're buying it just from this buyer and we understand that the duties are there, and we're not going to try to skirt around that in any way. So the non-reimbursement statement can be provided either in a traditional paper copy, you would provide that to the broker, and they could keep that on file with the entry packet and also report that it exists along with the entry. You can also file the non-reimbursement statement electronically in the ACE portal. And once you do that, you'll get kind of a document identification number, you want to provide that information to your customs brokers so that they can transmit that along with the entry. If you've determined your items aren't in scope, we really recommend that you have a brief reason as to why and that you provide that to your customs broker. The reasoning really behind this is twofold. One, it's really great for you as a company to understand why your goods don't fall into the scope of a particular antidumping or countervailing duty case. And often, customs will actually ask customs brokers if they have this type of backup. So having this provided to your brokers either upfront or readily available can help avoid any kind of delays with clearance, if questions happen to come up from customs in this area. One thing I just want to note is that the antidumping and countervailing duty determination process does need to be completed for every single case that potentially flags for any of your commodities. So that consideration needs to be made across the board for every single case. And as I mentioned, there could be commodities that are subject to multiple antidumping and countervailing duty cases or some sort of combo of both. So it can get complex, but just make sure you're looking at each case individually when you're doing this determination. Okay. And then the last thing to do to kind of expand on what I was referring to on the last slide is make sure that your own records are updated internally. This is going to help everything flow smoothly as you're going forward with entries in the future. If you have parts databases and you had items that were subject to antidumping and countervailing duty cases, go ahead and update that information in your parts database. Same thing, if you have an SAP or other database you used to create your commercial documents, it's good to potentially put that in there. Again, make sure you have backup for your determination, positive or negative, and that you have that ready to go and stored in case anyone is asking for additional information. It's also a really good practice to build antidumping and countervailing duty into your import compliance manual. So does your company have a set way that they are determining this information, best practices that you're using, how do you record your findings, all of that being built into the compliance manual is a great thing to have on file if customs comes around asking questions. And also just to keep everyone in your organization on the same page with how you guys are treating these particular cases. And then also, again, just communicate any of the information to your customs brokers, if you have a standing -- standard operating procedures with them, SOPs, or if there's other standing instructions that you have for your customs brokers, it's great to build all this information in upfront so that they can use it to hopefully process your entries as smoothly as possible. Awesome. Okay. We're running a little behind. But Ted, would you like to tell us a little bit about some of the resources that are available.

All right. Thank you, Sila. So yes, 51 minutes have gone by and a whole big old pile of information has been given to you. So we did work really hard to add it this down to the core concepts related to AD/CVD, but there's a lot more that goes into this, quite frankly. And I know a couple of you have asked about advanced upper division type webinar on this. When you do get the survey information from us, please go ahead and make some notes on what you might like to see in this area, and you're welcome to send us e-mails directly as it goes because we're just trying to get to the baseline here. So here are some of the resources that we have talked about or maybe we didn't get directly to this. You will get a copy of this presentation with this resource list, and these are live links on all of this page. So you can click to the various spots that are on there. On the ITA, the thing I would highlight, they just released this new gizmo, AD/CVD proceedings data visualization. They're using Microsoft Power BI, which a lot of folks are familiar with. It's a pretty cool visualization tool of all the case activity out there, has links to search and other things like that. So I would say, take a quick look at this as you get it. Certainly, CBP has a whole lot of information on their websites. We highlighted some of the key points. When you get to that priority trade issue website, you'll find links to a dozen other sites with FAQs and a whole bunch of other things. And then the Congressional Research Service, if you're not familiar with the CRS, there's a group of scholars who basically support U.S. Congress. They write a lot of interesting papers on all sorts of things, not just trade, but anything Congress is weighing in on, and we've talked about how Congress cares very much about protecting U.S. manufacturers and workers through [ ADD ], CVD legislation so there's a fair amount of research and stuff you can find over there. If you're a customer of ours, we certainly will -- we provide a complete analysis of your parts database to identify HTS as that might be flagged for AD/CVD. If we're in the process of doing a declaration and we don't have information, but it looks like it might be subject to CVD, AD, we will reach out to you. There are trade consultants that can help you with this. Sila mentioned this idea of digging in. If you're not familiar with Tradewin, that's our wholly-owned subsidiary of trade compliance consultants, and they can certainly help you and then our trade flow product also has a -- it's a suite of kind of trade management solutions and there's information that you can utilize in that tool as well. Finally, we do endeavor to support those of you who are certified custom specialists under the NCBFAA Education Institute. So this has been accredited by NCBFAA, The NEI for one CCS credit. Again, you're getting a copy of this presentation, and you'll be able to use that.