Air Cargo Industry Faces Disruption as Trump Tariffs Hit Chinese E-commerce

Los Angeles, December 6, 2022 - President Donald Trump's decision to eliminate duty-free exemptions for low-value e-commerce shipments from China has sent shockwaves through the air cargo industry.

Impact on Chinese E-commerce

Last year, the US imported over 2.5 million tons of cargo by air from China, including approximately 1.3 million tons of e-commerce products. The Trump tariffs could severely impact this trade, forcing Chinese e-commerce giants like Shein, Temu, AliExpress, and Amazon to adjust their business models.

Air Cargo Sector at Risk

The air cargo sector is expected to bear the brunt of the tariffs' impact. Chinese e-tailers have been key drivers of airfreight demand, relying heavily on air cargo to ship products directly to consumers. As e-commerce traffic declines due to the tariffs, air cargo rates are projected to plunge.

Industry Response

Logistics providers, customs brokers, and trade professionals are struggling to understand the new regulations and adapt their operations. Confusion reigns as the White House has provided limited guidance, while US Customs and Border Protection (CBP) remains largely unresponsive.

Alternatives to Airfreight

Experts anticipate a shift from airfreight to ocean shipping for e-commerce deliveries. This could result in longer delivery times and reduced inventory levels in the US. Other potential coping mechanisms include bulk shipping and re-routing shipments through other countries.

Implications for Other Industries

The reduced demand for air cargo could have wider repercussions, including lower rates for other air cargo markets. Traditional air cargo users, such as automotive and electronics manufacturers, may benefit from increased capacity at lower prices.

Long-Term Consequences

The long-term impact of the tariffs is uncertain, with potential for permanent shifts in e-commerce fulfillment and cross-border trade. The industry is adapting to the new landscape, but the full extent of the disruption remains to be seen.