The air cargo industry is bracing for potential disruptions as stakeholders await updates on global tariffs from the US, creating uncertainty about the impact on the sector.

Yesterday, the White House saw a flurry of activity as President Donald Trump announced executive orders imposing additional tariffs: a 10% increase on imports from China, a 25% hike on all imports from Canada, and an additional 25% tariff on goods from Mexico. While the tariffs on China will affect the de minimis exemption for specific goods, Canada and Mexico have negotiated agreements delaying their tariffs by at least a month.

Trump also indicated that tariffs would be applied to imports from the European Union (EU) but suggested that a deal with the UK might be possible.

For the air cargo industry, tariffs remain a significant concern. When the US implemented tariffs on Chinese goods in 2018 and later on European products, it initially led to a surge in air cargo shipments before a downturn in demand throughout 2019. A similar pattern may emerge with the latest round of tariffs.

China has already retaliated against the new 10% tariff by imposing levies of its own on US goods, including a 15% tariff on coal and liquefied natural gas (LNG). Meanwhile, Canada initially responded with 25% tariffs on $30 billion worth of US imports before reaching a settlement with the US.

One mitigating factor is that goods merely transiting through tariff-affected countries remain exempt, provided compliance with tariff regulations is maintained. Logistics platform Flexport clarified: “Only goods originating from affected countries will be subject to tariffs—not those simply passing through. Additionally, retroactive tariffs will not apply before February 4, but anything after this date may be subject to them if implementation is delayed.”

The impact of these tariffs is compounded by rising ocean freight costs. Xeneta, a global freight rate analytics firm, noted that while shipping rates were expected to decrease following the Israel-Hamas ceasefire, the new tariffs could offset any cost reductions. Chief Analyst Peter Sand highlighted that unlike the 2018 trade war, shippers have had limited time to front-load imports or shift supply chains away from China.

“US shippers are facing successive waves of disruption and soaring costs,” Sand explained. “After dealing with surging ocean freight rates due to Red Sea conflicts, they are now burdened with a 10% tariff increase on Chinese imports. Absorbing these costs without raising consumer prices seems nearly impossible.”

Sand added that while the delay in Mexico’s tariffs is a relief, the escalation of the US-China trade war presents a much larger economic risk.

Beyond broad tariff concerns, e-commerce trade is a focal point for the air cargo industry. Of particular concern is the removal of the de minimis exemption, which currently allows imports under $800 to enter duty-free. Trump has announced that this exemption will be revoked for all Chinese goods subject to tariffs. The same policy will apply to imports from Mexico and Canada if their tariffs are enacted.

Data from Rotate reveals that the US imported 1.2 million tonnes of e-commerce goods from China last year, underscoring the sector’s significance in terms of volume, even if its total value is lower compared to other types of imports.

Rotate also reported that in 2024, the US imported 1.1 million tonnes of general cargo from China and 1.4 million tonnes from the EU—both of which may soon be affected by tariffs. In contrast, imports from Mexico and Canada were significantly lower.

As the industry waits for further developments, stakeholders emphasize the need for detailed technical guidance to assess the full impact on low-value e-commerce shipments. With ongoing uncertainty surrounding trade policies, businesses must navigate rising costs and supply chain disruptions while preparing for potential long-term shifts in global trade dynamics.

 

Source: aircargonews.com