EXPDExpeditors International

We operate in over 60 countries in the competitive global logistics industry and our activities are closely tied to the global economy. International trade is influenced by many factors, including economic and political conditions in the United States and abroad, currency exchange rates, laws and policies relating to tariffs, trade restrictions, foreign investment, and taxation. Periodically, governments Governments periodically consider various changes to tariffs tariffs, and impose trade restrictions and accords. Currently, the United States Government has undertaken a substantial global trade rebalancing effort resulting in significantly higher tariffs on imports. Increased tariffs on certain sectors for Canada, China, and Mexico took effect in the first quarter of 2025. Additionally, reciprocal tariffs on certain countries were expected to take effect in April 2025, and were later postponed to July and August 2025, while trade negotiations by country were taking place. In the third quarter additional tariffs were imposed on imports from most countries including India, Brazil, and Japan. The United States has also imposed increased significantly higher tariffs on China, and is considering imposing increased goods made in China. Additionally, sectoral tariffs on imports from Canada, Mexico, steel, aluminum and their derivative products, as well as investigations were launched on other countries. commodities since the second quarter of 2025. These measures will likely face have led to threatened or actual retaliatory tariffs and trade actions from these countries. several countries, including China and Canada. The "de minimis" exemption, which exempted goods made in China and Hong Kong of less than $800 in commercial value from tariffs and entry submission, was terminated on May 2, 2025, and expanded to all countries on August 29, 2025. The potential for further tariff increases changes and trade restrictions remains high, creating an unpredictable environment for international trade. Additionally, changes to Changes in import and export regulations may further impact the flow of trade. trade and the global economy. On February 20, 2026, the United States Supreme Court issued a ruling on certain tariffs imposed in the United States under the International Emergency Economic Powers Act (IEEPA). The ruling invalidates many of the tariffs imposed on imports to the United States in 2025. The decision also allows for potential refunds; however the process to issue any such refunds is uncertain and likely subject to pending formal implementation, collection instructions and Court of International Trade decisions. We are currently assessing the impact this ruling and resulting tariff changes will have on our customs brokerage services, including post-entry activity. This decision could spur new sectoral tariffs in the United States and introduce additional uncertainty with respect to current and future U.S. trade policy and impact global trade flows. We cannot predict how changes in tariffs, tariffs and trade restrictions, and accords restrictions will affect our business. As governments impose import and export restrictions, shippers may adjust their sourcing patterns and potentially shift manufacturing to other countries over time. Doing business in foreign locations also subjects us to a variety of risks and considerations not normally encountered by domestic enterprises. In addition to being influenced by governmental policies and inter-governmental disputes concerning international trade, our business may also be negatively affected by political developments and Additionally, the constant changes in government personnel or policies in trade regulations since the United States and other countries, as well as economic turbulence, political unrest and security concerns in beginning of 2025 are adding complexity to the nations and on the trade shipping lanes in which we conduct business and the future impact that these events may have on international trade, oil prices and security costs. We do not have employees, assets, or operations in Russia, Ukraine, Israel, the Gaza Strip or the West Bank. While limited, any shipment activity is conducted with independent agents in those countries in customs declarations process, making compliance with all applicable trade sanctions, laws and regulations. We have a branch and employees in Lebanon but no significant assets. regulations increasingly challenging.

As our employees, our customers and suppliers continue to increase reliance on systems, and as additional features are added, the risks also increase. Any significant disruptions or unapproved third-party access to our global systems or the internet for any reason, which could include equipment or network failures; co-location facility failures; power outages; sabotage; government interference, employee error or other actions; cyber-attacks or other security breaches; reliance on third party technology; geo-political activity or natural disasters; all of which could have a material negative effect on our results. Significant disruptions to, or unapproved third‑party access into our networks and systems could materially harm our business and financial results by interrupting critical operations and degrading systems continuity. Potential disruption vectors include equipment or network failures, co‑location facility outages, power interruptions, sabotage, government interference, employee error, cyber‑attacks or other security breaches, dependencies on third‑party technologies, geopolitical events, and natural disasters, any of which could sever connectivity to our global systems or the internet and impede execution of core processes. In such circumstances, we may be compelled to shut down systems to protect the environment, as we did during a cyber-attack in February 2022, we were the subject of a targeted cyber-attack. Upon discovering the incident, we shut down most of our operating systems globally leading to manage the safety of our overall global systems environment. This shutdown lost revenue; shipment‑processing delays and any such future events are likely to result in loss of revenue; other business disruptions (such as the inability to timely process shipments); and interruptions; significant remediation costs. This cyber-attack, or any future cyber-attack could also result in increased vulnerability and incremental security costs; heightened exposure to attempts of fraud, fraud; legal claims and proceedings including (including potential breach of contract claims, breach‑of‑contract assertions); reporting delays or errors; errors, including interference with regulatory reporting; an increase in costs to protect our systems and technology; or damage to our reputation. regulators. A future cyber-attack may also result in the destruction or exfiltration of our data as well as that of our customers and service providers.