Greetings from Washington. My name is Mark Herlack and I'm a partner in the Washington office of Eversheds Sutherland. I serve as the global co-chair of the firm's Competition, Trade and Foreign Investment Group. Hello everyone, my name is James Lindop and I am the partner of the firm and also the global co-chair of the Competition, Trade and Foreign Investment Team. James and I lead a group of over 75 lawyers who devote their time to a range of cross-border issues, particularly international trade and tariffs. The sun never sets on our international trade team, which resides in offices around the globe, and we're delighted to have you here this morning. James? James Lindopoulos So in terms of our international trade practice, we have specialists around the globe across our network of offices. However, we operate out of three primary hubs, being the US, Asia, Europe and the UK, and we have representatives on this webinar today from those particular hubs. James Lindopoulos So today you're going to hear from the following people. Jeff Bialos is a partner in our corporate group, Resident in Washington. Jeff has served in a number of key international trade positions in the Departments of Commerce, Defense and State, and is one of the firm's leads on aerospace and defense matters. Ginger Falk is also a partner in the Washington office in our energy group. Ginger is a trade lawyer with a particular focus on sanctions and export controls, and she heads our US sanctions practice. In London, Monica Yadin-Urdman is a partner covering a broad set of trade matters, under both UK and European law, including export controls, and trade remedies. From Hong Kong, we welcome Jocelyn Chow, who leads our international trade practice in Asia. She leads our team in Asia on competition and international trade matters, and is the global co-lead of our supply chain group. Finally, from the UK is Peter McCormick, who heads our UK strategic contracts group, and with Jocelyn is global co-lead of supply chain group. So now, to set the same, we're going to turn to our two colleagues in Washington, Jeff Bialos and Ginger Falk, who will describe what the Trump administration is doing on trade policy and the current state of play. Jeff and Ginger, over to you. Thanks, Mark and James. Pleasure to be here with everyone today. We titled this section Tariff, Chaos, Drama, and Then What? Because it was not surprising that Trump 2.0 would focus on increasing tariffs and using tariffs as a tool. The president, as president-elect and president, has clearly signaled that. What's surprising is the chaotic and unpredictable nature of it. What's the plan and what's the intent? It's purportedly to generate domestic manufacture through increased investment, but the issue, of course, is the lack of continuity undermines that goal. Some think the goal is to generate revenue to offset tax losses from the big, beautiful bill, or some people think it's just a prelude to making deals. We will see. It's hard to know. But I think what's fair to say is we have something of a new normal. It's now a 10% tariff against most countries with a few other higher ones. And the question is, what's the tariff rate going to be going forward? You know, I think it's fair to say, and we'll come back to this, the new norm is going to be different than what it has been under the WTO-based system with most favored nation. And that's going to be somewhat turned on its head. But to set the stage briefly, what we have today is China 30%, 20% for opioids, 10% for reciprocal, except for smartphones and computers. Mexico and Canada 25%, but only for goods not meeting the origin rules of the US-Mexico-Canada agreement. The part to pause on, pardon the pun, is the fair and reciprocal tariffs. The president in April unveiled a set of very high duties and said they would go into place. Those have been paused until tomorrow, July 9th, with the idea being there would be deals negotiated. There are a few deals negotiated. My colleague Ginger Falk will talk about them in a minute. By and large, not too many deals negotiated. And there's been lots of drama about this. But the president's now made clear that the date, the tomorrow date will slip to August 1, you know, when they will put in place either the Liberation Day tariffs or another set of tariffs that they've announced for certain countries who've got letters and will come to the next. And I'll talk to you in a minute. But in the minute. But in the backdrop of all this, there are two court decisions ruling that the president exceeded his authority under the International Economic Emergency Powers Act for issuing both the fentanyl trafficking tariffs, as they call it, from Mexico, Canada, and China, and the reciprocal tariffs for the rest of the world. Basically, the courts ruled that this was outside the president's authority under the Emergency Act, the International Economic Emergency Act, based on the very old ruling by the U.S. Appeals Court, where I clerked years ago, so I have some context and perspective from that. This is a national court of appeals, in effect, for trade. The court didn't question the president's ability to declare an emergency. That's something that's largely non-justiciable. The issue is, the statute says the president can regulate imports, and does that include the ability to impose tariffs? On the reciprocal tariffs, the court found that the delegation to regulate imports doesn't authorize the president to, across the board, unboundedly impose tariffs against the entire world. This was based on the court. This was based on the court. This was based on an old ruling, where the court, then called the Court of Customs and Patent Appeals, approved the authority of President Nixon to put an import surcharge due to a balance of payments crisis. But in the dicta in that case, the court said, you can't do it against the whole world. And that's what they relied on here, because they have to live with that precedent. On Canada and Mexico, somewhat different theory. That is to say that the imposition of tariffs does not, quote unquote, deal with the emergency. So there's no linkage between the declared crisis on fentanyl and the tariffs, the idea being that the tariffs aren't going to address and solve the fentanyl crisis. The matter is on appeal before the CAFC, which we'll hear the arguments. The Court of Appeals, on August 1, it may be forthcoming. My guess is at 60-40, they get upheld. Rather, the lower court ruling gets upheld, and the president is found to have lacked the authority. What's interesting is that on appeal, the Court of Appeals isn't bound by its prior precedent. So it may just choose to decide that regulating international trade doesn't allow it to impose tariffs at all, and essentially walk away from the ruling. We'll see. Two thoughts here. One, some countries may be hoping for very long extensions, hoping that, you know, to see if the courts uphold this or not before cutting a deal. Because why cut a deal if the courts are going to deny this authority? Second, even if the president is found to not have the authority under IEPA, there are other authorities that could be used to sustain some of these tariffs. 301 for China, 232, which you'll hear about in a minute, and others under 338, for example, which is mentioned. Next slide, please. So just briefly, these are the rates that will go in August 1 on the left for these 14 countries who've gotten little letters from the administration saying these rates go into effect unless we do something different between now and then. It may be that there are other letters we'll see. Otherwise, it could revert to the Liberation Day tariffs. One other point. The administration has said, look, if you invest here, we'll do a lot of things to make it easy and we'll facilitate that so you can manufacture and invest here, which is, after all, some of the goal of this. So next slide, please. And let me pass this over to Ginger to talk about where we are in cutting the deals. And, you know, again, what the president and his staff has said is that tariffs will boomerang to the proposed levels if no deals in place. Thank you, Jeff. And hello, everyone. Certainly, the July 8th and now the August 1st boomerang deadline have injected urgency into the trade negotiations with U.S. trading partners and contributed to this climate of uncertainty. So far, only a handful of agreements have been finalized. The most notable two are the U.S.-U.K. economic prosperity deal and the U.S.-China framework agreement that was signed on June 26th. Now, our colleagues in those offices are going to speak to those agreements in more detail. I will also mention that the president announced last week that U.S.-Vietnam deal had been agreed, which sets a 20 percent tariff on Vietnamese imports to the United States and a 40 percent tariff on trans-shipped goods, mainly trans-shipped goods from China. So that provision on trans-shipped goods targets products that are not originally manufactured in Vietnam but are rooted through Vietnam to exploit its lower tariff status. And the Trump administration framed this trans-shipped goods and the Trump administration framed this trans-shipment tariff as necessary to close the third country circumvention loophole. So this trans-shipment 40 percent, I want to highlight it because it underscores Washington's intent to crack down on tariff evasion and raises some compliance and verification challenges for importers of Vietnamese products. So these deals, U.S.-U.K., China, and Vietnam, these are significant, but keep in mind these are exceptions. Out of nearly 180 countries affected by the worldwide tariffs, only the two agreements have been fully completed and the rest of these remain in limbo. So the European Union and Japan are now racing against the clock to reach a deal. Japan in particular faces a real strategy. Japan in particular is a real strategic dilemma because on one hand it's a key U.S. ally, it's a vital player in the Indo-Pacific. On the other hand, the political situation domestically, the sensitivity around the agricultural sector, particularly over U.S. exports of rice, have made it really difficult for Japan to offer the concessions that the Trump administration is demanding. So these negotiations have really stalled, reportedly, over the issue of auto imports and rice market access. You can flip the slide, please, by the way. Thank you. So India also is negotiating a deal. It's demanding – the U.S. is demanding greater agricultural access there, even as it seeks to expand its defense ties with India. South Korea is focusing on industrial supply chain cooperation with the U.S., but has not finalized the deal. And as Jeff's slide shows, would be subject to boomerang tariffs. Canada is under pressure to resolve its disputes with the U.S. over the digital services taxes and the dairy quotas, and all of that while the U.S., Canada, and Mexico are preparing for the 2026 review of the USMCA. So this deadline presents a real challenge for all these countries, especially given the unilateral nature of the U.S. approach. And the confusion and uncertainty and the lack of transparency in – My colleagues will speak more to that. We will return to this issue of trade agreements. But before we do, we'll go to the next slide on the 232 tariffs. These are really important. And Ginger, if I could just interject for a minute, and I should have said that. On South Korea and Japan, it's shocking that the letters were received. Those very close U.S. allies, part of our strategy for the Indo-Pacific to address the security threats, are going to get 25% duties. It seems to put trade policy ahead of national security policy, and there's a real issue there. But over to you. Thank you. So I'm now turning to Section 232 tariffs. And first of all, these are tariffs that are issued under the authority of Section 232 of the Trade Expansion Act, which authorizes the President to impose trade restrictions on imports that are deemed to threaten U.S. national security. This statute has been revived and expanded under the first and second Trump administration to address a much broader set of economic concerns than it has been used previously. The process of a 232 review begins with an investigation by the Department of Commerce, which has 270 days to assess whether a specific category of imports impair national security. And if the Department of Commerce, which has 270 days to address a much broader set of economic concerns, and if the Department of Commerce, which has 90 days to decide whether and how to act. Now, the second Trump administration has already expanded and doubled, actually, the tariffs that are imposed on steel and aluminum imports from 25% to 50% for most countries, with only a few exceptions, like the UK, which is keeping its 25% rate. The administration has also the second Trump administration has also eliminated nearly all of the country and product exclusions and is enforcing strict melted and poured origin standards. So that so importers must now report the country of smelt and cast for aluminum and steel or they can face default tariffs that are as high as 200%. And this slide shows you the pending investigations that are in progress under the 270-day timeline. And you can see that it affects a broad swath of imports. So what's really notable is the sheer scale and scope of these investigations. And these are not fringe industries. These are the backbone of U.S. manufacturing, defense, and digital infrastructure. In fact, in fact, the Council, a statement at the Council on Foreign Relations said that the Section 232 investigations in process and the tariffs now in place could affect up to 40% of U.S. trade. So that represents a structural shift in how the U.S. engages with the global trading economy. If I can add two points, sorry. One is, yes, there's a long 270-day timeline. All indications are, at least with respect to commercial aircraft, there may be one or two of these other ones. There's some expectation that the tariffs on commercial aircraft will be coming in the next month or two, for example. That's been the indications out of the administration informally. We'll see if that's the case and that, in fact, happens. The other question is, what's the interface between these pending tariffs, like on commercial aircraft and the existing negotiations? Will an EU deal cover the 232 preceding tariffs as well? We just don't know, I guess. Yeah, well, certainly the Trump administration is using the 232 tariffs as a way to extract concessions from trading partners. So the 232 tariffs do play a really big role. in the negotiation of trade agreements. In fact, the EU consistently has pushed back, insisting that the 232 tariffs be removed as a precondition for their deeper trade cooperation. So what we're likely to see is that any resolution with the EU will probably be conditional on EU concessions in other areas. And the administration, and the administration, and the administration, the Trump administration may offer limited country-specific exclusions if the EU agrees to reciprocal market access. Thanks, Ginger. So if you can go to the next slide for us to finish this up and take it home. I mean, you know, the question people ask all the time is, what's going to happen here in the end? And this is my take on it, which is that, look, there are a number of areas where there have been legitimate, non-tariff and tariff barriers with even close allies over the years. And in some of these cases, steel and auto or two, auto imports into Japan as a non-tariff barrier, rice imports into Japan as a non-tariff barrier. There are going to be duties on these things if there's no other resolution. Some tariffs will be lowered through negotiation. But I think what is fair to say is that we're looking toward a new paradigm in a lot of these cases, and a departure from the longstanding WTO, MFN approach through these country-specific tariffs that exceed WTO levels and exceed the standards or contrary to the standards for when we can depart from MFN status, which is typically if there's a free trade negotiated, agreement negotiated. So what's the endgame here? Is it, you know, tariffs for revenue? Is it agreements to, is it tariffs for manufacturing? That seems to be the intent. Will it encourage US manufacturing? That remains to be seen. To do this, you need sustained continuity of tariff rates and a belief by investors that those tariffs will stay in place. Otherwise, they're not going to build factories here. And that hasn't happened to date. Okay. And what I would point out as a more likely scenario is what we saw in Trump 1.0 with respect to steel and aluminum. And there's an ITC report that says, what happened was, yes, there was some limited increase in manufacturing for a short period. Not many new plants, some expansions, but the overwhelming effect was increased prices. Import prices went up, of course, due to the duties. And domestic producers raised their prices below that, but higher than they were before. So let me just close by pointing out to, there's a famous economist called Ricardo. Ricardo. And there's a model of historic gains from trade based on comparative advantage. There's a reason some industries migrated offshore from the United States to other countries. And what I will tell you is a former Pentagon official worked on the industrial basis. In the last 50 years, I can't think of a significant manufacturing industry that reshored in the United States. So color me skeptical. I'm not sure we can overturn these basic rules of comparative advantage through increased tariffs. Thank you. And thank you, Ginger. Jeff, Ginger, thank you for giving us the update on a US policy and indeed on the state of negotiations from the US perspective. Turning now to some of those important jurisdictions elsewhere. Jocelyn, can you give us an update from a China position, please? Yep. Thank you, James. So let's start with China because no picture of this new normal would be complete without it. The 90-day pause announced on the 9th of April by the US did not apply to China. And that's really because China responded with retaliatory tariffs and additional trade controls. It actually hit back. And so over the next five minutes or so, and before I hand it over to my friend Monica, I'll walk you through China's response and to give you a sense of the overall direction of travel in this ongoing trade war between the US and China. So on the screen, you will see a timeline we have created highlighting the key events on and after Liberation Day from a tariff perspective. I myself was actually in Washington DC when all of this unfolded and it did feel like watching a thriller. Like you knew something was going to happen. Not quite sure what and how, but it was clear that it was going to trigger shocks and heightened anxieties. And that's exactly what happened. So over those nine days in April, each side took turns escalating tariffs in a tit-for-tat fashion. And whilst for brevity, this chart focuses on the reciprocal tariffs imposed by the US on the one hand and the retaliatory tariffs imposed by China on the other hand. Behind the scenes, as Jeff already mentioned, the US had already imposed a sweeping 20% centenial-related tariff on all Chinese goods. And for context, I would just pause here to emphasize that this tit -for-tat dynamic between the US and China is not new. It is likely to continue given the interest involved in the way trade tools have been weaponized by both sides. It began during Trump 1.0 when the US started targeting China with trade measures, primarily sanctions. And China responded by starting to build its its own sanctions regime and destining US individuals. And then under the Biden administration, the US shift focused export controls on advanced chips and related tech. And China in turn tightened its own export controls, especially on rare earth materials critical to the upstream chip production in the US. And that has continued to be a core pillar of China's current response to the US trade moves. So now at Trump 2.0, even though the sweeping, non-product specific tariffs imposed on all Chinese goods are, of course, unprecedented. Because China basically started preparing for this in Trump 1.0, it has been able to react, as you can see on the screen, very quickly with a full suite of countermeasures, leveraging the trade controls framework it built up over the past five to six years. That's the saying, in the Asian Chinese book, the art of war, which says that, like, raise your troops for a thousand days and use them in one more days and use them in one morning. And that's exactly what China did in April. So that's why, as you will see, between the fourth and the ninth of April, following Liberation Day, China topped the US tariffs, and it also didn't stop there. So between those days, it also imposed additional eczema controls on seven more types of rare earth materials that are critical to the global supply chains. It also made additional destinations of US companies on various sanctions and also the Chinese equivalents and also the Chinese equivalents of the entity list. And these measures have had a significant impact on businesses, no less than the tariffs themselves. And because China responded, on the ninth of April, the Trump administration then announced a 90 day pause applicable to everybody but China. And then at the same time, it raised reciprocal tariffs on Chinese goods up to 125%, bringing the total tariffs to 145. And on the 11th of April, China responded with retaliation tariffs of 125%. And in the same notice, indicated that it would no longer respond to any further tariff increase by the US. The reason being that the Chinese market for US goods was effectively closed. And frankly, that was quite likely to be the case, no matter how inelastic any domestic demand for US goods could be. So I was about to board a flight from New York to Hong Kong when the announcement was made. But by the time I landed, we had already received urgent inquiries from businesses caught in the crossfire with the record high tariffs. With shipments on and route to China or the US rerouted or held up at the borders as customs authorities raised questions about the origins of the imports. And clients began exploring exemptions or alternative supply chain solutions to achieve substantial transformation in a third country. Rightly, rightly so, all in an effort to preserve the assets to the respective Chinese and US end user markets, which are too large to lose. So during that period, there were also rumours that China was going to grant additional exemptions. That never happened. And finally, after the first round of the trade talks between the US and China in Geneva in May, both countries agreed to a 90 day suspension of any new tariffs. The second round of the trade talks that took place in London in early June, were apparently more focused on the export control measures I mentioned just now. So in terms of the status and China's response, China's retaliation tariffs on US goods now stand at 10%. There's an additional 24% tariffs imposed by both sides that have been suspended for 90 days up to the 12th of August. So we'll have to see how things will pan out. And then China has also suspended several destinations made against US companies in April, while the rare earth export controls remain. So that's my overview. And before I hand it over to Monica, I would just add that realistically, whereas the two economic giants have signaled a willingness to de-escalate, the situation remains highly volatile. And given the broader backdrop of the tip for tech that has gone on for years and the events of early April, at this part of the world where I'm in many businesses believe that it's just a matter of time before we find ourselves on this roller coaster ride again. So while it's difficult to, you know, as Jeff said, predict the end game, it's unlikely that these trade controls will go away entirely. So plan ahead and listen to what James and Peter and Ginger will tell you later on. On that note, I will hand over to Monica, who will walk us through the EU and the UK's responses. Thanks so much, Jocelyn. So the UK has remained much more cautious and conciliatory compared to China. And arguably, to some extent, that also has paid off as the US and UK signed the economic prosperity deal that Ginger mentioned earlier. The general terms of the deal have been published, setting out immediate commitments by both parties, and also indicating areas where they intend to negotiate further. To clarify, to clarify, this is not a free trade deal, but it will result in cooperation in certain sectors, and also a reduction of applied tariffs. So in particular, we've got a reduction in tariffs on cars. So the US will apply a 10% tariff rate on UK cars up to an agreed quota. And this is a reduction from the proposed 27% rate. A tariff quota will also be allocated to steel and aluminium products at reduced rates, and the parties will lower tariffs for certain agriculture products, in particular, beef and ethanol. They will also apply a 0% tariff to the import of airspace goods. The UK and the US have openly said that the general terms of this deal do not constitute a legally binding commitment, and negotiations to implement the proposals will continue. The deal has now been partially implemented with 100,000 quota allocated for imports of UK cars. And this quota represents roughly half of the UK's annual exports of cars to the US. So while this is not a groundbreaking deal, it does certainly represent a positive step in trade relations between the UK and the US. The areas of proposed collaboration also offer potential opportunities such as lowering of non tariff barriers, including working to enhance agricultural market access. The UK and the US governments have also announced their mutual commitments to focus negotiations on additional key areas, including sectors like pharmaceuticals, and the intent to collaborate in areas of advanced technology. including biotech, including biotech, life sciences, quantum computing, and nuclear fusion. So the potential for future collaboration on emerging technologies in particular, is of key interest given the move towards protectionism in these areas in recent years. Next slide please. So the EU has taken a two pronged approach. Firstly, it did announce countermeasures. So it has been preparing a 26 billion euros package of retaliatory tariffs, reinstating suspended duties on US goods under prior regulations when the trade wars were happening. And this includes 25% on copper, aluminium, and steel, and steel. The US also has consulted on its proposed countermeasures targeting additional products. Although the outcome of that consultation has not yet been made public. The implementation of all of those countermeasures has been suspended until the 14th of July. And a door obviously has been left open for further negotiations. So the tariffs could be delayed or modified if a deal is reached soon. And on the other side of the trade, it's also been suspended until 14th of July. And a door obviously has been left open for further negotiations. So the tariffs could be delayed or modified if a deal is reached soon. And on obviously in light of the US extending the US. Obviously in light of the US extending the initial deadline to the 1st of August. The implementation of those retaliatory measures will likely be pushed at least until then. And the second approach of the EU was negotiation and de-escalation. So despite this much more confrontational rhetoric compared to the UK, the EU has remained open to discussions. And the negotiations between the EU and the US have been intensifying in the last few weeks with hopes that a basic deal can emerge soon. It is very possible that any deal that emerges will look similar to the UK-US economic prosperity deal. So with only some tariff level commitments and mostly aspirational points to be negotiated further. There is reportedly though a lack of consensus among member states. So the big question is whether the EU should reach a deal at all costs to avoid a trade war or to respond robustly if the deal is simply not good enough. The EU is also monitoring for indirect impacts on supply chains such as third country dumping due to diverted US trade. So there may be investigations in the future and also more customs frauds which might taint supply chains as a result of those trade wars. Next slide please. So we know that the uncertainty that's been created by this tariff situation along with significant supply chain disruption have actually had an impact on the transactional space. In fact, a recent BWC Pulse survey notes that 30% of nearly 700 US executives said that they've paused or are revisiting pending deals. due to the new tariffs. There's also a separate office of national statistics survey which was conducted recently and it indicates that UK businesses report notable disruption in key sectors including technology, agriculture, automotive and metal production. So M&A strategies are being impacted by tariffs and companies are considering deeper due diligence on tariff exposure, revisiting deal and also planning around financial timings and financial timings and also planning around potential future policy changes with risk mitigation being a core focus. Companies have been considering strategies for cash preservation and reworking additional costs in the supply chain which may obviously create difficulties for company valuation. So everything that James, Ginger and Peter will discuss next in terms of short and medium term planning considerations will support businesses in reaching a position of comfort and also subsequently allow them to make strategic decisions more confidently. So on that note, I will hand over back to James. Thank you, Monica. Thanks to Jocelyn for that. So turning now to mitigation strategies that businesses can implement, which can have a profound impact on the application of these sorts of tariffs. But before we get on to tariffs. But before we get on to the dark art of tariff engineering and rules of origin, I just wanted to touch very briefly on basic customs rules. If we could just move on a slide, please, because these are often overlooked. Now, most, if not all jurisdictions operate customs procedures to simplify import and export and importantly, in the context of tariffs, reduce or mitigate exposure entirely. Now, duty deferral programs like free zones and free ports, which fall outside of a particular jurisdictions customs territory mean that no tariffs are payable until those goods clear customs. Equally, it's possible for business to use customs warehousing to store goods until they need to be released for distribution. Again, tariff free until that point of release. There are other mechanisms like temporary admission, which permit the import of certain goods temporarily before they're then re-exported. And what's called the end use procedure permitting release for free circulation at a reduced or zero rate of duty on account of a specific end use. And these are mechanisms that are available now that aren't necessarily always being considered or used by businesses. And so we've been looking recently, the last few months since these negotiations and threats were first initiated were first initiated to work with businesses to ensure that they are making use of these mechanisms that are, as I said, already available. And in some cases, some of these mechanisms have entirely reduced or mitigated to a significant extent the risk of tariff supplying to certain businesses. Equally, there are customs partnership programs such as Authorised Economic Operator, which allow businesses to effectively partner with customs authorities. And these mechanisms offer benefits such as reduced import costs and expedited customs clearance. And this was something that was used and considered quite significantly at the point of Brexit, certainly from a UK perspective. But again, these are the sort of mechanisms that businesses can be considering right now. And it can be particularly beneficial during times of heightened tariff uncertainty and changes in policy as customs authorities tend to ramp up scrutiny due to terms around certain Mortondid press prior to the arrival of those goods. So there are all sorts of mechanisms that we think that businesses should and could be using outside of the more scientific tariff engineering and origin rules that Ginger will talk to in a minute. And so it's an obvious point, but I think it is an important one. Certainly in the discussion we've been having recently with a number of clients, that to the extent that there isn't a robust internal trade and customs compliance strategy already being used by the business, then it's important to get one in place. These types of strategies, when they're seen by customs authorities, can really enhance a business's reputation in the eyes of that authority and enable businesses to build positive relationships so that they are treated as more reliable and reputable. And to the extent that any issues do arise, then often they can be sorted out much more quickly. Handing over to Ginger now to talk a little bit about tariff engineering. Yeah, thank you, James. And, you know, this concept of tariff engineering or tariff mitigation, it does include some of those simpler types of solutions that James was suggesting. And also things as simple as building up your inventory in anticipation of a tariff reduction or waiting to import. I'm sorry, building up inventory before the tariff increases or waiting to import if you anticipate a tariff reduction. I'm going to talk a little bit. I'm going to talk a little bit also about some of the more complex kind of changes to supply chains that companies are making to adjust to the new normal. For instance, adjusting your manufacturing process to reduce your costs or frequently to source from alternative sources of supply or to move your manufacturing to a new country to benefit from a new country. And that's a new country of origin. That's a new country of origin. So I have to make a really important note on this idea of changing the country of manufacture to create a new country of origin. It's really, really important for importers to be able to substantiate the declared origin of their goods, especially if they're claiming preferential treatment under a trade agreement. So this means maintaining documentation, auditable, documentation to demonstrate that the products either originate wholly from a single country or that they have undergone substantial transformation in the third country. That is a legal standard. It requires a fundamental change in the product's form, function, or character. So simply assembling parts or repackaging goods in a third country does not qualify. The transformation must be significant enough to create a new commercial product. And the reason I'm highlighting this is that the stakes right now for accurate origin declarations are extremely high. The administration through customs has signaled a more aggressive enforcement of anti-circumvention rules, particularly targeting transshipments and origin masking. So CBP is expected to ramp up audits, deploy its advanced data analytics, and imposing increased penalties for violations. So it's important to proactively review your sourcing strategies, consider these tariff engineering and reclassification options. But to do so, putting customs compliance as paramount as both a legal obligation and as a strategic imperative to avoid enforcement actions and to be able to maintain access to U.S. markets. So I said that some of these changes can be very, very complex. So if we go to slide 19, please, on valuation and valuation methodologies. In the United States, the dutiable value is typically based on the transaction value, which is the price that is actually paid for the merchandise when it is sold for extra and the exportation to the U.S. Certain costs, like international freight, insurance, and the foreign inland freight can be deducted from the transaction value if they are separately itemized and documented. This means that if these costs are not included in the price actually paid, if you can get accurate, or if you can get accurate documentation in the actual of these services, you can export from your dutiable value. And I'm getting a lot of questions about the first rule, which allows importers to use the price paid by in a multi-tiered transaction as the basis for its customs valuation and to use the first rule, the price by the final buyer. But in order to use that rule, the first rule has to be an arm's length transaction. It has to be, and importantly, it has to be, and importantly, the U.S. must be, quote, the clearly an irreversible destination for the goods at the time of the first sale. So that has to be documented as well in shipping instructions and in the contracts that relate to the shipment. So that's just a few words on different types of tariff mitigation techniques. And now, return to Peter to talk with us about strategic contracting in your supply chain to deal with new tariffers. Thanks, Ginger. Yeah, we thought we'd just spend a few moments now, you know, having, we've worked through our tariff mitigation strategies and there's still tariffs applying, looking at actually, okay, well, who bears, financial responsibility for those tariffs within our supply chain contracts, whether that's with our suppliers or our customers. I think, and obviously this is something that we've done a lot of in the last few months for clients in all sorts of different sectors. So this really kind of represents, you know, what we've found in looking at a myriad of different contracts. First thing to look at, and it sounds really easy, are, you know, the express terms of the contract. So typically, in international trade, quite often based on the income terms rules, there's about a dozen different income terms setting out responsibility between buyers and sellers of goods across a range of things, including responsibility for paying import tariffs and duties. And so you can see there we've got on the screen just a couple of examples. If it's an ex-works income term, if it's a free carrier income term, the buyer will be responsible for the payment of any tariff. If it's DDP, delivery duty paid, then it'll be the seller that's responsible for the tariff. So quite often, if the contract contains those income term references, that will give you the answer as to who is responsible between a buyer and seller for the payment of a tariff. Next step, if there's no income terms, again, look for, sorry, if we go back to the previous slide. Thank you. Yeah, back to that first slide again. So the next step, then, if there were no income terms in the contract is again to look at the other express terms. So does the contract expressly deal with responsibility for carriage delivery, import and export duties? And again, that may well give us the answer. Where it gets more interesting, I think, is if the contract is silent, or it's ambiguous or inconsistent. I'm sure that most people on this call have seen contracts that both included a particular inco term and some express terms of the contract that were inconsistent with each other and didn't actually work very well together. In those circumstances, what we find is typically it's a question of contractual interpretation and important to try and therefore establish where where is the place of delivery under the contract with the likelihood being that each party will be responsible for bearing any costs of complying with its own contractual obligations. So for example, if the place of delivery is beyond the border, beyond, let's say, the US border, and the point at which a tariff becomes applicable, likelihood is that the seller of goods will be responsible for paying for that tariff because they've got the obligation to deliver across the border. So if we can move to the, finally move to the next slide now. So then we may have established through the express contractual terms or our contractual interpretation, where we think that basic position for responsibility for tariffs lies. We might not like the answer to that question, or our customer or supplier might not like the answer to that question. So what other clauses are there in the contract that maybe you might look to if you want to try and vary that basic position? And probably in our experience, the most likely to bite is something around a price variation mechanism that maybe talks about changes in costs and reallocates responsibility around changing costs. So looking to see whether there's any specific price variation mechanism. Force majeure is something that people perhaps think about in this context. I suppose in most jurisdictions, not every jurisdiction around the world, but most jurisdictions, force majeure is a creature of contract. And what is or is not and does or does not amount to force majeure is usually dependent on the wording of the contract itself. But if you think about, you know, the sort of words that you usually see in force majeure type clauses, you know, events or circumstances outside the reasonable control of the affected party, probably in most contracts, which contain a usual definition of force majeure, in position of the tariffs is likely to be a force majeure event. But of course, that's only half the half a question in a force majeure clause. Again, generally, you will only be entitled to any relief in the event that the force majeure event hinders or prevents or delays performance, rather than as a tariff may, simply making performance more more expensive or unprofitable or unprofitable. And indeed, in some jurisdictions, and certainly in the UK, there is case law that says that essentially, change in economic circumstances typically will not amount to a force majeure event. So probably, in most circumstances, we don't think that force majeure is likely to be particularly, particularly helpful. So we can move on to the next slide, please. So what else can we look at? Changing law is a fairly, fairly obvious place to look. And again, I think, in most contracts, again, it's a creature of contract, but in most contracts, the imposition of tariffs, I think, is likely to amount to a change in law. But again, if you think about how changing law clauses are typically, are typically drafted, they give one party the rights of one party the rights or perhaps as a negotiation in relation to any changes that are required as a result of a change in law. And I think the key question for me in that scenario is actually, does the imposition of tariffs require a change to some contractual terms? Or does it just mean one or other party's desires wants to change those contractual terms? So whilst likely to fall within a definition of change in law, it may well not actually give either or the party any relief or any particular rights, again, depending on how that contract is drafted. Material adverse change and hardship clauses, I think are a relevant area to look at. Probably the one watch out, I would say, in relation to material adverse changes, it's not that unusual to see, you know, financial impacts carved out of the kind of trigger for material adverse change. So worth looking at. But again, look at the words on the page, again, look at the words on the page, and then think about individual jurisdictions that may have specific hardship, hardship laws, that's very much a kind of a jurisdiction by jurisdiction point. But again, worth looking at to see whether there's anything implied that may help. Finally, I suppose looking at, you know, contractual variations, it's a little bit, it feels to me, in some cases, like some of the circumstances we found, you know, during COVID, where actually just having that engagement with customers, engagement with suppliers around this, as we heard people say, kind of new normal, and what does that mean for contracts, I think that customer supplier management is really important. And then ultimately, you know, if the imposition of tariffs has made the contract, you know, unprofitable, looking at other ways that we can actually get out of the contract, you know, either under its kind of express terms or anything more creative. Okay, I think that's all I have to say for now. And I think I'm probably handing back to Mark or Ginger, you've come off mute. Yeah, I just want to throw one more type of tariff contract clause into the mix. And that is a non-discrimination clause. And so this is important from the buyer's perspective, it ensures that the seller will treat the buyer no less favorably than others. other similarly situated customers. So this means that the seller can't prioritize other buyers for tariff free or lower tariff goods, while passing higher costs to you as the buyer. So a non-discrimination clause would say, seller shall not, in the event of any tariff or trade related cost increase, allocate supplier pricing in a manner less favorable to buyer than to any other similarly situated customer. Because without this type of clause, the seller can manipulate potentially how the goods are classified or sourced to shift costs, might reclassify a product's origin to avoid tariffs, which could expose the buyer to compliance risks or penalties. So the non-discrimination clause we've seen is especially important when dealing with limited tariff free quotas, like those in the US-UK deal. Or when sourcing for multiple jurisdictions with different tariff exposures, you just want to get non-discriminatory treatment from your seller. Thank you, Ginger. Before we close, I'd like to throw the ball back to Jocelyn and Asia, because she talked a lot about China. I wonder what else you might want to say about the rest of Asia. Thanks, Mark. I think, with the exception of China, so far, some of the APEC countries have imposed retaliatory tariffs or otherwise responded negatively to the US. Most of them are, as Ginger and Jeff helpfully summarized, negotiating trade deals with the US. The topics appear to range from opening market assets to US companies or otherwise committing to increase imports of certain US goods and technology and not to retaliation. But these are not going to affect their FTAs with China, on the other hand, in so far as they maintain good relationships with China. Because so far, as you have seen, China's trade measures are all retaliatory in nature. So just to bring it all together, businesses with a significant Chinese end-user market should definitely explore the extent to which they can leverage the benefits of FTAs between China and other APEC jurisdictions in the region. For example, the ASEAN jurisdictions, or even Hong Kong, which is right next to mainland China, and benefits from the best FTA with China in the world. So to the extent a business side is able to restructure the supply chains accordingly and achieve substantial transformation, as Ginger explained, that may provide an economically viable and legally defensible alternative definitely businesses should explore that. Definitely, like businesses should explore that and we can help with that. If I may, let me add one point, which is you've all laid out a lot of interesting strategies. But in light of where we started with this, which is there's chaos and drama and who knows what's coming. Isn't one strategy, I get that some people have to mitigate some costs because they have a contract in place and they're supposed to send something and there's going to be a duty. But putting aside sort of immediate mitigation, why wouldn't you just wait and see what happens and avoid making substantial changes in your supply chain and avoid bearing costs? Because frankly, who the heck knows what's going to happen next? Well, on that note, I think as you've heard this morning and afternoon, the one thing that is certain is uncertainty. This is going to remain an incredibly volatile situation. Given the most recent postponement in the reciprocal tariffs. We would expect a very busy month of July. And so we'd like to leave you with the thought that it's going to be very important, one, to keep track of what's going on because things are changing almost daily. And two, to develop commercial options. Ways that you can address whatever the morning papers may bring over the course of the coming weeks. So with that, on behalf of our trade team, we thank you for listening. And please don't hesitate to reach out if you have additional questions that we weren't able to address in this past hour. Thank you.