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

Good afternoon, everyone, for once. I think as we're all getting together, it is actually afternoon for everyone on those calls. So welcome to U.S. Customs Market Update presented by Expeditors. This is our October edition. I joke with friends and family that I can probably repeat most of this in my sleep by now. But what is not repetitive is obviously the content we're going to present because every time we join on one of these monthly calls, we have new content, new changes to present to you from the U.S. customs market. And so we will get right into it after a little bit of housekeeping, just go over some of these rules real quick in case one of you or some of you on here are new to these webinars. And if so, welcome. I hope you get a lot of value out of joining us today. If you are hearing my voice echo, maybe hearing me twice, I'm so sorry, please make sure that you are not joined in multiple places. If you hear that echo, that is likely what is going on. If you have another question about today's content or in general about any technical issues, you can drop your questions in the Q&A box or if you have a technical issue, you are welcome to e-mail me directly through your confirmation e-mail that you got from me, Samantha Hurst. And to introduce myself, I'm one of our regional managers for marketing and bids for the Americas region. And I'll just be supporting in the background here today. So one of the things that everyone always ask is how do we receive the slides. So we absolutely will get the content from today's webinar to you. We just encourage you to fill out a quick feedback survey that you'll receive via e-mail from myself within about an hour or 2 of today's webinar wrapping up. And at the very end of that survey, just pay close attention because it won't take you to a new page. It will just give you a thank you message. And then at the very end, there's a link that will take you to all materials. And that will include the recording, the Q&A, questions-and-answer pairing and then also the presentation slides. So without further ado, let's get into it. I'll introduce our speakers and then -- oh, quick disclaimer. Just remember that today's information is for educational purposes. We are not lawyers by any means. We are just here to give information about what we see happening in the customs market and give you some idea of how it might impact your business. Again, this is not meant for legal decisions to be made based off of this content. Now I'll introduce our speakers. We have a smaller group today. We've got a couple of people traveling as this team often is very busy people, but we appreciate Madeleine Veigel, our Vice President of Customs for the Americas, is on with us today; and Stephanie Holloway, our Senior Director of Customs. So they will pop on. Stephanie, I believe you are taking it away.

I am. Thank you, Samantha, so much. Samantha is going to die that I'm going to say this. But I feel like we're all in this webinar family together. And I got to meet Samantha for the first time. And she said, you're going to see how short I am. And I was like, you can't honestly be that short because she gives off -- you guys can chime in on this. She gives off such tall people vibe. And she is 5 feet tall, everybody. And the whole time, my brain just couldn't reconcile it. So Samantha, now everybody, all 1,200 of us now know how tall you are.

So, 5 feet tall on a good day.

If anyone else was wondering, there you go. So now some insider baseball to Expeditors. Hey, look at that, Samantha, there's another 5-foot tall person in the crowd, so I love this. Now everybody is going to be guessing at how tall Madeleine and I are. Madeleine is taller than me, just so everybody knows. So let's jump in here. We are alternating back and forth. So I'm going to be doing tariff and trade section. I'll hand it off to Madeleine, who is taller than me, to talk about what's happening in the court system. I'm going to talk about what's on the horizon, and then Madeleine will wrap up with enforcement. So we have a nice full agenda as we always have. Customs and the Trump administration always provide. So we never have to worry that we'll have enough. So with that said, I think our last webinar was September 22, if I'm remembering correctly. And at that point, the Section 338 import ban had not yet started. So as we all know, Section 338 was one of, I would say, the first time the Trump administration had used this legal basis to put tariffs on, and it was for Canada. You use Section 338 when there's discrimination against U.S. commerce. And the Trump administration said Canada was discriminating against 3 industries: dairy, autos and alcohol. So the tariffs were proposed. There was a 50% tariff that took effect back in August. So when we met, that tariff was already on, okay? The scope got changed not that much longer, a few weeks longer. A few weeks went by, and the scope got changed around mid-September. And essentially, what it did was it said there is going to be an import ban. They adjusted some of the HTS numbers because a big part of Section 338 that you have to understand is the HTS that the U.S. is targeting from Canada do not correlate directly to the discrimination in the products that is happening. Some of them do. But it's not just like, hey, I don't import dairy, I don't import autos. I don't import alcohol. Therefore, this won't impact me. That's actually not how this works. So they made some adjustments to the HTS list and then we were all wondering, hey, is this import ban going to happen? Because the other thing about this kind of, I'll say, ping-pong match for lack of a better word, between the U.S. and Canada is that each is giving each other kind of a long leeway, right? So the U.S. will announce something, but it's not just, hey, this is happening tomorrow. There's usually a few weeks. And I personally -- this is Stephanie Holloway's opinion. I think it's because they want each other to come to the table. They really want to have an agreement here. But at this point, we don't have one and the import ban did start on September 29, okay? So just because I am a little bit of a trade nerd and I like data, I wanted to look at our own data set. So this is just Expeditors' entries to see, hey, what played out right? So I think most of us know there's obviously going to be certain industries that are going to be more prevalent to be imported from Canada down to the U.S. So over here on the far left column, and I've used this before, this is how U.S. CBP groups you as an importer. It's called the C Center of Expertise and Excellence or your industry. So what I did was I said, hey, as we've gone through each of these iterations working our way towards the import ban, what happened? Okay? So this is where it's obviously fun if you play with data, but it's real fun with AI because I was trying to kind of level set it and say, hey, we definitely do more auto than agriculture and prepared [ pot ] products, aka alcohol, but let's equalize those so that we can look at it as a cross-section. So everything has been equalized to this pre 338 level to 100. And then what you can see there is at the 50%, what happened at the expanded scope mark, what happened and then with the import ban, what's happened. And what you can see really is the automotive, consumer products, machinery, a little bit up, a little bit down, not too many swings. But of course, at least for what Expeditors import, it's really the -- it's buried within the agriculture and prepared pot products. That's where the alcohol is that we import that's been hit very hard. So you can see there that there definitely was a significant pickup before the import ban. So you can see that these importers truly believed or were at least hedging their bets that this import ban may happen. And therefore, they got a lot more products in, almost double, and then now it has decreased, of course. So there's still food products in there that can be imported, which is why that's not at 0 or even a lower number. So that was fun, right? Just a little bit of nerd talk for you. So, another thing that I want to touch on is we have 338 happening right now. There's a lot of, I would say, almost trade noise happening, but it's almost hyper specific, okay? So it's like, hey, if you don't import from Canada, 338 isn't really that impactful to you. But if you do, and especially if you do alcohol or something that's on the import ban, it's really impactful. And that's how I feel like these -- like almost everything I'm going to talk about in this category is right now is it's just kind of noise unless it hits you, then it really hits. So I'm going to talk about them a little bit in a broader sense as well because through all of this, looking for the themes is the really important part, okay? So this is a good theme one to look at. So on -- when did this come out? A couple of weeks ago? I'm going to go -- yes, sometime in the last couple of weeks. There was a release, per se, done that helped to define U.S. content for a very specific situation under Section 232 metals, if you're taking this Annex 1C mobile industrial equipment and machinery, if you're taking that exemption, there was a reference to U.S. content, but it was never defined. So this came out back in June 8, I think, is when you could start using it or at least that's what the slide seems to convey. And if you had used it, you were kind of in this gray area. You kind of had to make up your own definition for U.S. content. So this isn't super unique. This is a space that many of us keep finding ourselves where you talk to one trade lawyer, they're interpreting it one way. You talk to a consultant, they might think another thing, you're reading it, maybe your broker, somebody thinks something else. We all kind of have our own thing that we're trying to work through, and we're not often given extra clarification. But when it does come, we have to adjust, right? That feels kind of obvious, but it just feels like another thing that you have to do and keep track of. But unfortunately, that's what we're in. So this is a great example of that in terms of if you were an importer and we had such few ones. So I know this is not super impactful to folks. If you use this, now all of a sudden, you need to have a mechanism to relook at the definition that came out. And then we got to figure out, hey, does this involve doing PSCs? Do I need to go back? Customs hasn't issued a CSMS message on it yet. What do I do with this information, okay? So this is more of a looking at it as that theme. So when you're in those gray spaces and you're making those choices, how do you keep track of that? And then how do you make sure that you're circling back when there's more data being provided. Going along a little bit on the same theme as the import ban, we are looking at an interesting time with Section 232 polysilicon. So we have a looming Section 232 case on polysilicon that will be coming in, in December. This Section 232 case was actually announced in August. This is definitely the largest runway that we have had between when a case was announced and when it is being implemented. The second longest was probably pharma. So this is unique. But what we also are seeing now is that I have to look at this -- I'm like how long ago was this? About a month ago, Commerce put out an anti-stockpiling rule, okay? So this is also very unique. We have not seen this before for other 232. So in your head, if you have a pending 232 medical equipment, this might be something that is introduced for your products as well. So just something to kind of think about. So it's still on track. They didn't move the date. So it's still December 4 is when this is going to get implemented. But now commerce is watching to see, hey, how much do you normally import? And are you still within those bounds? And if you need to import more, you need to talk to commerce directly so that you can get that approved, okay? Or if they don't approve it, it's going to need to go into a bonded warehouse until December 4, and which at that point, you can import it under the Section 232 duty structure. So very interesting, very unique. We have not seen this before. Once again, right, it's a very sticky packy things, very impactful to some, very small enough, not so impactful to all, but how do we look through and find the themes of what we all need to be looking for. The last thing I'll touch on in this section before I turn it over to Madeleine is the Russian sanctions law. So this is the Lindsey Graham bill that was passed back in September. And we talked about this on the last market update. And it was an interesting thing to talk about because this is a whole another unique way that tariffs can be administered, okay? So it allows tariffs to go on Russian origin goods and the top 5 buyers of Russian crude and natural gas or the top 5 facilitators of Russian oil sanctions invasion (sic) [ evasion ]. Evasion, sorry. So even if you are just buying products that have nothing to do with Russia, if the country of origin is one of the countries that ends up on this list, you could be highly impacted, okay? So the secondary tariffs on this could end up being quite far reaching, let's say, okay? Also, these tariffs are set to stack. Now of course, I don't know exactly how they'll be implemented, but I think you should really assume that, that is something that would -- that could actually happen. Now on September -- on October 16, so just recently, an executive order came out, there's a link to it here, that essentially sets the rate amount, so you can see there 500, 100, I mean, crazy times that we're living in. But that same executive order also waived all of those duties and most of sanction provisions for now, okay? So I want to reiterate, no new Russia-related tariffs are in effect. There's still others that are on the books. Those didn't go away, okay? But there are no new tariffs from this lot, okay? So what's really important, though, is that this law is completely queued up, okay? It is ready to go. They have the executive order out. They have everything ready to go. So this thing could turn on a dime. I don't know if it will. There was a report, it wasn't written down, and I can't remember who said it. So I probably should say a lot on a webinar, but they essentially said that they are going to reassess this in mid-December. So take that with a grain of salt, but this is a very important thing to keep an eye on. And they did not list the countries, they didn't list the top buyers or facilitators. And that's where I think a lot of people, if you're trying to read the tea leaves there's a lot of latitude in how those things will be defined, Ken? So we will see what happens. On that note, Madeleine, I'll turn it back over to you to talk about the court system. Also very lively these days.

Yes, very lively. Lots of updates. And I am a little taller than you, Stephanie. Not a lot, but a little. Okay, everybody. Yes, there is a lot of news in this section. But first, we'll just kind of -- we'll just start with some stats on cake. So you'll see here that originally, the government or the administration when CAPE first rolled out, they said, "Hey, there are about $166 billion worth of IEEPA duties that have been paid by importers. And that covered about 53 million entries and around 330,000 importers. And as of October 2, the government has processed the administration, CBPs processed $136.6 billion of that amount in CAPE. So not that it's made it maybe all the way through CAPE or it has and has been fury certified as a refund. But 136.6 billion has been accounted for through CAPE. Of that amount, $126 billion has been actually refunded or at least sent to the treasury set up for a refund. So that leaves about $30 billion that's still on the table, everybody still on the table in terms of refunds. So we can say pretty large portion has been accounted for by CBP, so that is good. One other thing I would say though about this, which is kind of interesting, and it's something, obviously, we talked a lot about when CAPE first rolled out, was making sure you have an ACH account setup, so you can receive the refund from CBP. And I'm still -- we run weekly reports on this, and there's still importers, lots of importers that don't actually have their ACH setup. So maybe just another little blurb on that, just make sure you've got your ACH refund or ACH can set up so you can receive the refund because there are still importers out there that don't. So anyway, that's where we're at in terms of current stats with CAPE. So quite a bit has been processed. But really kind of the big news or headline -- most recent headline news is the fact that we have -- we are now in CAPE version Phase 3. So we can flip to the next slide, Stephanie. So CAPE Phase 3 is finally live, and that went live on October 6. So as of October 6 -- well, actually, as of October 7, after the first day that it was live, there are about a little over 1 million entries that were uploaded into CAPE and that covered about $500 million in claimed refunds that had been accepted. So there are a few caveats though for CAPE Phase 3. First of all, it's -- so it's not open everybody, right? You have to have filed a lawsuit in the Court of International Trade in order to be able to file in CAPE Phase 3. The second caveat is that you must have given your IOR number to CBP by July 30. So if you had filed a lawsuit in the Court of International Trade and you have submitted your IOR number to CBP, then you can start filing for a refund in CAPE as of October 6. And of course, that also means that your entries are past that 80-day final liquidation cycle. And we'll go through the liquidation cycle again here in a moment just to remind everybody. But the other big news that came up just this morning, and some of you may have seen that already, is that CBP, they had said on October 6 when they rolled this out that anyone else that other folks that have filed a lawsuit in the Court of International Trade, but maybe not until August or at a later time or last month, they will be sending out instructions on a rolling basis when those importers can also file in CAPE. And just this morning, there was a notification that if you file the lawsuit in the Court of International Trade and you provided your IOR number to CBP as of July 31, up through August 13, and you can now also file for a [indiscernible] CAPE. So that's brand new, hot off the press. So they are -- CBP is sending out those instructions on a rolling basis. So again, if you filed late August or filed in September, you will get instructions as to when you can actually put your entries to CAPE for a refund, okay? So anyway, so that is probably the hot news in terms of CAPE Phase 3. It's alive and working. But again, got to have file lawsuit, got to have submitted your IOR number to and your entries have to be in the right liquidation, post liquidation cycle. So anyway, -- so I think we can go up to the next slide in. So this is just -- and we've shared this slide before everybody. This is just the life cycle of a customs entry. It's just kind of a reminder. When the entry is filed, then when the entry summary is due by tenth day and then duties are due by tenth day unless you're on periodic monthly statement. And then we go through this long liquidation cycle. Normally, entries liquidate about 314 day-ish or-ish after the entry date or after the date of entry, and then customs can still make adjustments from that 314 day up to -- from 314 days plus 90. And remember, custom said that 314 up to the 80th day. That's the previous phase of CAPE. But once you got beyond the 80th day, right, then it gets into Phase 3 and the Phase 3 is what just got rolled out. And it's usually after that time to that CBP rarely makes any other modifications. So you have to be 80 days plus in order to take part in this Phase 3. So hopefully, that made sense. You'll get copies of this if you need to go back and look at the life cycle of an entry. Okay. So other big news on the IEEPA refund front, -- so the CIT, so the Court of International Trade and that famous judge [ Eaton ], and he's kind of famous now because he needs to -- been the judge involved with all these IEEPA refunds. He certified a class based off of a lawsuit that Freestyle World Incorporated filed against the U.S. So what does that mean? So a class is really a group of importers or a group of companies that are basically making the same legal claim, right? And that's what we have here is we have a whole bunch of companies [ and importers ] saying, "Hey, I want my money back. My IEEPA duties back because the Supreme Court deemed that those duties were established illegally to the administration. So I [indiscernible] my money back. So this is why Judge Eaton said, I can create a class here because it's a bunch of companies that are all making the same legal win, okay? So that's what he did. And that also means, again, it covers all importers -- this class now covers all importers that filed between February that had paid IEEPA duties between February 1, 2025 and 19th of February of 2026. The only importers that it excludes are those that filed a lawsuit in the Court of International Trade. So only if you file the lawsuit in the international -- Court of International Trade and you're not part of this, but if you didn't, then you're automatically part of this class right? And you can't really opt in or opt out. It's just you're part of it. okay? And there were roughly 4,000 -- just kind of a side note, there were roughly 4,000 companies that did file lawsuits in the Court of International Trade. But, now we have this class, right, that was determined by Judge Eaton. But that does not mean you're getting an automatic refund. We all wish that, that would now mean, okay, give me -- give us our money back. No, it doesn't mean that yet. So the court has to enter or has to declare a class-wide injunction, and that would allow CBP to process all of these entries. And they have not done that yet because, of course, they have to allow time also for the opposing party, the government to appeal. And we all know that the government will appeal this -- will appeal this case. So for right now, there's going to be a discussion between all the parties and a schedule is going to be proposed as of the 22nd of October, which probably will define what the next steps. So that will come out the 22nd of October. But this process, everybody, this is going to take a while as you can well imagine. Because the government is going to appeal. This does not mean you're going to get your money back quickly. This could still take a year, 2 years, who knows, but it's going to take some time. It's not going to be immediate. So I think this is probably a good thing, especially -- well, especially for the smaller importers that haven't really done anything with CAPE yet that have been confused by CAPE don't know how to quite how to even submit their entries through CAPE, then being part of a class may be a way for them to eventually still get their IEEPA duties back. So really, this becomes a discussion kind of internally because you're all probably -- or many of you may be asking yourself, God, what should I do? Should I file a lawsuit in the Court of International Trade? Or should I just -- since I haven't, I'm part of this class action suit now, should I just kind of wait and see how that plays out? So if we go to the next slide, Stephanie, you really have to kind of take inventory internally. First of all, look at how much -- how many entries do I have that are past that 80-day final liquidation cycle, right? How much money am I still, in a sense, owed or how much money should I still be getting back in terms of IEEPA duties? And then if it's a lot of money, that may be a consideration to go to file a lawsuit in the Court of International Trade because you may get your money back quicker going that route. If it's not a lot of money, and maybe you could say, hey, I'm not going to go through the trouble in the expense of filing a lawsuit. I'm going to sit back and see how this class action suit plays out. I can wait. It may take a while, but that's okay. But these are discussions that you really have to have internally with your -- okay. This is what I'm going to say again. I'm not a lawyer. You definitely want to talk to inside internal counsel or talk to a trade attorney and figure out what makes sense. Should I file the Court of International Trade lawsuit? Or should I just watch and play this out? Another thing to consider is with a lawsuit in the Court of International Trade, you have 2 years, 2 years from the date the duties were deposited. So for -- in many cases, some of those entries, it may be getting close to the time where if you need to file a lawsuit, you have to do it fairly soon. So again, that's another consideration, the timing, right? So you really have to look at -- where am I with my liquidation? How much money am I still due that the government hasn't paid me back on IEEPA duties? And then is it a lot, a huge amount? Is it a small amount? Is it worth it for me to make the investment in the Court of International Trade and maybe get a quicker refund? Or should I just wait and see how this class action suit now plays out? And it may take a year, it may take 2 years before I ultimately get my money. But these are discussions you should have with the lawyer and half of the folks inside your company to figure out what is my best strategy. Okay? Definitely not something -- definitely a lot to consider. And you definitely want to be talking to an attorney on what is your best path of action on this. Anyway, a lot to consider and think about. And then there is other tariff litigation everybody. So this is something to watch as well. So remember, in July, the Section 301 forced labor tariffs went into effect. Remember, this is managed by the U.S. Trade Representatives office or the USTR, they did a big investigation. It covered 60 economies. And they said, hey, in all those countries, we feel, the U.S. government feels those countries have not done enough to prevent certain items or items that are getting imported into those countries, they're not doing enough to ensure that those manufactured goods or those goods, whatever they may be, were not manufactured with forced labor. So they haven't done enough on the forced labor front. They're allowing goods to come into their countries that may have been manufactured with forced labor. And that puts U.S. on an unlevel playing field because we're also importing similar items into those countries, we're not at the same level playing field because we're probably having to -- or those goods will have to be sold for a higher price. So anyway, at a very, very high level, that's what the U.S. government was saying. It's like, hey, other countries are not doing enough on forced labor. So it covers 60 economies. And there have been some companies that said, hey, I don't think this is right. I don't think the U.S. government, I don't think USTR did a thorough enough investigation. I'm really questioning how much they really looked into some of what these other countries are doing. So there have been lawsuits that have been filed against the U.S. government. And on the 30th of September, the Court of International Trade, they heard the argument from the USTR. And then they issued additional questions, both to the USTR and to the plaintiffs in this case, the companies that [ suit ]. And the questions, there's a list of about 6 or so questions. One of them to give you a flavor of that, of what it looked like or what it sounded like is that they asked the government, they said the USTR -- hey USTR, what statutory provision did you rely on to deem that the other countries have done not enough or have done unreasonable amount or have done an unreasonable amount to curb force labor. What statutory provision did you rely on. So they've asked that among some other questions to ask the USTR to respond to. For the plaintiffs for some of the companies that suit, they said, "Hey, you did not import from all those 60 economies. So do you have the right leg or a solid leg to stand on in bringing this lawsuit forward? So anyway, those -- the plaintiffs and the government had to get back to the Court of International Trade with their responses last Friday. So you may have seen there have been some publications on what USTR provided as a response and what the plaintiffs provided as a response. So now we just have to wait and see everybody what the Court of International Trade is going to do on those 301 forced labor tariffs. And we have to watch this closely because this could play out as of potentially another refund opportunity, but we'll see. This one is going to be a little bit more if than maybe the IEEPA refund case was. Then we also have the lawsuits that were filed under Section 122. So remember, that went into effect in February. It was really used to replace the IEEPA duties, right? And it was done under the whole premise of a balance of payment deficit. So there have been some companies that suit the government and said, hey, U.S. administration, there really isn't a balance of payment deficit with many countries. So we think you did this illegally. So in May, the Court of International Trade said, hey, we actually agree with the importers that brought forward the suit. There was a spice company, a toy company and also the state of Washington. And there were some other states, I believe. But basically, for the state of Washington, the spice company and the toy company, the Court of International Trade said, we agree with you. We don't think there's a balance of trade deficit, but actually, -- so we agree that those tariffs were implemented illegally, but only for you. So in other words, this is different than IEEPA. Before with IEEPA, they said really should apply to all importers for Section 122 is just those 3 importers. However, as you can imagine, as soon as that came out in May, May 7, the government immediately appealed. So now we're just waiting, right? It's -- the appeal was filed and we just have to wait and see ultimately what the courts decide. This could also go all the way to the Supreme Court. This may also end up in a refund situation, we don't know. This is also kind of a difficult case, but we should all be watching these cases because it does mean or could mean there are other future refund opportunities, we don't know. So anyway, keep your eyes open for what happens next, both in the Section [indiscernible] forced labor case and Section 122 case. So anyway, Stephanie, I think you have to tell us what is on the horizon. Oh my god.

I don't know. But I know there's more. So many good lawsuit questions, Madeleine. And I'm doing this. You can over head over there and I check all of those out. But I think what most of you are seeing on the lawsuit that's becoming super strategic from a business decision is whether or not you want to file in the Court of International Trade. So that's really the part that you need to think about, a, how much money is in that bucket. If it's $100, that's probably not worth your time. However, there's a lot of money there. That's probably what starts opening up the door to your company to say, hey, do we want to go file in CIT. With the overarching back stock of this 2-year mark. So you have 2 years, typically, once again, as Madeleine keeps saying, not lawyers, you have 2 years from the date of injury to file in the court system typically, that means you are coming up against this deadline. That's going to be February 2027 or March 2027, depending on when you started paying IEEPA duty. So those are the key things you need to know. Before you go crazy, make sure you know how much money is in that bucket and then that can start the conversation and that's where I think the best place to start with. Okay. So, no more lawyer talk, no more court tuck. Let's talk about what's coming. So somebody said, "what's a lot of money." That's up to you. I don't know. It depends on how much you want to pay a lawyer. Okay. So U.S., China, so I think actually, last week, when we -- or last week, feels like week. Last month when we were talking, that's when President from China within the U.S., and we were trying to -- we were all speculating if there was going to be conversation around trade. And there was a bit. So this is what came out of our conversation with China. So let's level set. So first of all, we all know that the original tariff back from 2018 for Section 301 are still on. And they have actually -- there's a 4-year renewal process that now will have gone through -- this is our second time. I don't know, I'm probably messing up on my math here. But List 2 and 3 just got [ referred ] okay? So that's important. So those Section 301 China tariffs are still -- those are on, those are rolling USTR just reconfirm that. However, there's a link here to this U.S.-China Board of Trade Agreement. And you'll start to see Board of Trade as an acronym is the big B, little O, big T, BOT. No, I don't know. BOT, however you want to say -- all of a sudden, I felt like I kept seeing all the stuff that was BOT, BOT. And I was like, what is BOT, what did I miss? Board of Trade, okay? So essentially, what they're looking at, and if you click on this link, you can see both the China list and the U.S. list. So China and U.S. have said, we are mutually going to look at -- I wish I could remember. It's like some dollar amount. So dollar amounts into China, dollar amount into the U.S., and we are going to say that these items that we're going to identify. I believe, if the way I'm reading it, we will see, we'll drop down to MFN pricing, okay? And I also believe that the list that have been identified are not on the section 301 list, okay? So all speculation, we will see how all this plays out. But the important part is that, that list of 77 categories, some of it is HTS based. Some of it is kind of a description base. So if you remember, and we're around in the industry for the good old days of 2019, 2020, we were doing a lot of Section 301 exclusions, which same kind of concept where it would like some were HTS, some were description. That's what this kind of feels like again to me. So we will have to see. They're going to open this up for a comment period. I have not seen that posted yet. If I am wrong, please put it in the chat if you know that this maybe go posted in the last hour, let us know because there's going to be a lot of people that are obviously very interested in commenting on this. And it's a lot of items I think I heard [indiscernible], he gave like a list of products and included fireworks. So there's things that the U.S. does not want to manufacture. So apparently, we don't want to manufacture fireworks, we want to get them from China. So fireworks are definitely on the list. So there'll be opportunities for people to comment. It's a lot of that type of not just explosive manufacturing also kind of toys and things like that, that may be the U.S. isn't so interested in developing manufacturing expertise within the U.S., okay? So more to come. This one -- this slide is so busy. But what this is looking at is low-value shipments. So we know that there has been some pretty big evolution since President Trump took office in terms of the administration's approach to low-value shipments, okay? So this is another phase that is being looked at. There was a proposed rule that just came out 2 weeks ago. It is over 100 pages of good time reading. I'm bringing it on my phone and I [indiscernible] at the airport and I'm reading, reading and like, "Oh my gosh, how much can somebody say about informal entries," a lot, over 100 pages worth. But what they're essentially looking for and comments are going to be available, they're due December 7 is they're really looking at when and how informal entries can be used. Now, right now, informal entries are the only kind of low-value shipment option that's out there. I want to make sure everybody on this call understands an informal entry from a preparation perspective for a broker is the exact same amount of work as a formal entry. They are [indiscernible], okay? There's some different bonding requirements. They liquidate immediately, but the actual preparatory like work the same, okay? So that was one of the things I was reading this. I don't think the government understands informal entries, and they are the same amount of work. So I want to make sure everybody here knows that. With this proposed one of the big things you have to understand is informal entries will not be able to be used if the freight has already [ arrived ] to the U.S., okay? So there's that. Also informal entries have a different fee structure for MPF merchant processing fee. I was trying to remember off the top of my head, all the benefits of Informal. The list is not huge. Every informal entry needs a bond. So that's I would say for expeditors if you're on this call, you have a bond, right? There's not many customers that are just running an informal schema here. Schema, that's not the word, [indiscernible]. Informal scheme and don't have a bond. So that one, not such a big deal, maybe for all of you. More data per shipment, so added final delivery to party if it differs from the company. And then they can also require formal entries in [ book ], okay? So you can kind of think this might be a little bit more attributed maybe to the couriers. But I know many of you are actually wanting your couriers, the traditional folks maybe that have done low-value shipments you're running your actual brokers to do them, okay? So there's also kind of a big industry shift that's happening within this space, okay? Now the good news, that's been a gray box. That's exciting. Section 232, 301 goods valued between $250 and $2,500 could use informs again, okay? So what do we do with this? I do think it is worth looking up, I have the link in here for the proposed rule. It is worth looking at thinking about, hey, what are you actually using informal entries for? Do you rely on that flow? I mean, maybe a little bit. This is also with like [ male ] shipments, not a letters I probably looked at my desk for a letter. I have one right here. Not a letter per se, but the small boxes, right, maybe an R&D box or things like that. Which ones of those are rolling through this? And then considering commenting, is this going to be a world ending change, likely no. But great stuff in here that's not great. And maybe there's also stuff from an importer perspective that I'm not thinking of. The key takeaway, of course, is that de minimis is gone. That is not a thing that in the U.S. anymore. Just in case you thought it might come back, it's actually in the Big Beautiful Bill, if you remember that, to really be killed July 1, 2027. So that is actually a congressional order, I shouldn't say order. It's on the books from a law perspective that, that will be over July 1 as well. So informal does not mean less work. It is the same amount of work from a broker and really thinking about those low-value flows and how this will impact you. But I think many of you, this has already impacted you. And many of you are already looking at alternatives for those low-value shipments. And the last thing I'll say is about overcapacity. So hopefully, you know the day that IEEPA, so February 20, 2026. The Day IEEPA got overturned and the Supreme Court said, you cannot use IEEPA to put tariffs on. The President announced 2 Section 301 cases he was opening, one on for labor and one on overcapacity. Forced labor, we know is here. We're all living it, right, where those [indiscernible] are being paid actively. The other one is this 301 overcapacity one. And Jamieson Greer had commented on it a couple of times, and it's coming soon. I don't know if it's coming soon or not most of the time when the administration says something is coming soon, it does. So I try to believe them in terms of what they say. However, there was an interesting development 2 weeks ago. Maybe you don't know this. But in Milwaukee, the week of October 7, the G20 trade ministers met, okay? And they came to this agreement, and I'm only highlighting it because, of course, it involves overcapacity that we have this kind of looming Section 301 open on that's just out there. It's gone through the comment period. It's just kind of chilling, waiting for USTR to take action. So on the overcapacity front, A number of countries signed, some of them did not kind of the media headline was about 75% of the G20 membership endorsed it, and they endorsed it on 5 sectors. So cars, especially EVs, batteries, chemicals, semiconductors and solar panels. So if you've been paying attention to tariffs, those are the hottest of hot commodity to talk about. But what these countries agreed to do was to start sharing data, okay, comparing notes on the impact of production in those sectors and to try to work together from a mitigation perspective, okay? So do I think that, that Section 301 will not come to be? No, I'm not saying that. I'm just saying that I think it's very interesting that we have a Section 301 [indiscernible] out there on overcapacity. There is conversation obviously among the G20 about overcapacity, and this will be an interesting thing to keep an eye on, okay? So we will see what happens. It also kind of means to just shifting sourcing or maybe strategies like that, that we have traditionally looked at to reduce tariffs. I think many of us now have seen that those are not super effective, but especially in new sectors, we might be getting the same treatment across the board. So interesting time to be alive. So with that, Madeleine, all shifted back to you to finish this out on enforcement.