Expeditors International of Washington, Inc. Status update

Great. Thank you. Thank you so much, Samantha Hurst. Good afternoon, everyone, and we are glad to have you with us to discuss the latest developments with Canada's counter-tariffs and what they mean for importers moving forward. I am joined today by Tara Wiese, our Customs Manager in our Windsor operations, Liz Murphy, Customs Brokerage Manager in our Calgary office, and David Mitchell, our Customs Solutions Manager here in Toronto. Together, they bring extensive expertise in customs compliance, brokerage operations, and trade advisory services, providing valuable insight in today's discussion. All right. So agenda. With September 8th fast approaching, Canada is preparing to introduce new counter-tariffs on a wide range of U.S.-origin goods. For many businesses and importers, it raises some important questions. Are we affected? What will be the additional costs? What can we do to reduce the impact?

Today we will answer those questions by breaking down what is changing, who may be affected, potential relief opportunities, and the immediate actions businesses should consider before implementation. Our focus will be practical, helping you protect compliance, manage costs, and make informed supply chain decisions so that you can leave today better prepared for September 8th. With that, I will hand it over to Tara to walk through the next section. Tara, over to you. Thank you, Steve.

As we all know, within days of the U.S. action, Canada announced a dollar for dollar countermeasure package. Canada's response targets approximately CAD 27.6 billion of U.S. imports through new surtaxes, and those surtaxes are ranging from 15%-50% on more than 700 U.S. product lines. The measures are scheduled to take effect September 8th, and they focus on many of the same industries impacted by the U.S. action. This transforms the issue really from a U.S. import challenge into a two-way trade disruption, affecting companies on both sides of the border. Today, I want to reiterate that importers should be reviewing product classifications, landed costs, supply chain exposure, and available remission opportunities now rather than waiting until the goods arrive.

The key takeaways here really are for any importer is that this is no longer simply a tariff discussion but a supply chain strategy discussion. Companies need to understand where they are exposed, determine whether any relief programs may apply, and then proactively model the financial impact before the cost begins flowing through their supply chain. Next slide, Steve. As I stated on my previous slide, Canada's response was designed as a dollar-for-dollar measure, and the objective is to apply economic pressure. For importers, this means a significant number of U.S. origin products may face additional costs when entering Canada. The measures are scheduled to take effect, as I said, on September 8, giving businesses a limited window to assess exposure and evaluate mitigation strategies. Unlike previous rounds of the retaliatory measures, this proposal introduces three different surtax levels.

The tiered approach allows Canada to strategically target products based on policy priorities and economic impact. But for businesses, understanding which rate applies to which SKU will be essential because the financial impact could vary significantly. The delayed implementation date creates a small window for further discussions and potential negotiation, obviously between Canada and the United States. While there remains an opportunity for change before September 8, businesses should not assume the measure will be withdrawn, and our recommendation is to be prepared based on the proposal published while monitoring developments closely as we will be. Here, the most important takeaway really is that the importers should use this period to understand their exposure and look at any remission opportunities where available. You will hear that multiple times throughout the webinar.

This would mean having a very in-depth conversation with your broker to discuss end use of products coming in and understanding if there is a remission that can be used to eliminate the surtax payout. Steve, next slide, please. I thought it was important here, just to really show you an example of how the surtax is calculated out. As you can see, in the United States, there really was a stacking There is, sorry, a stacking rule, where those products could be subject to multiple tariffs, and so simultaneously there is stacking. Canada, that is not the case. I just wanted to show a very quick example of how that is calculated out.