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Trump tariffs put earthquake under airfreight market

[ April 3, 2025   //   ]

Analyst Niall van de Wouw has described US President Trump’s ‘Liberation Day’ – in which he announced major tariff hikes on imports from most of the country’s trading partners as “a seismic shock” for e-commerce.

De Wouw, who is Xeneta’s chief airfreight officer, said that the cargo market is reevaluating its future as shippers, forwarders, airlines, and consumers come to terms with the economic reality of new import taxes and a potential international trade war. 

As expected Trump has also confirmed the elimination of duty–free de minimis treatment for low-value imports from China and Hong Kong, starting 2 May. All relevant postal items valued at or under US$800 previously qualifying for the de minimis exemption will become subject to a duty rate of either 30% of their value or US$25 per item (increasing to US$50 per item after 1 June 2025).

The announcement was one of many as Trump imposed sweeping global import taxes on goods into the US from 9 April.

Already reeling from the potential impact of the US’ actions, global air cargo demand is likely to suffer further harm from retaliatory actions by other countries. EU President, Ursula von der Leyen, called the US decision “a major blow for the world economy.”    

De Wouw warned that after more than a year of double-digit growth, air cargo now faces an uncertain future.

“In my 30 years working in the air freight industry, I cannot remember any other unilateral trade policy decision with the potential to have such a profound impact on the market at a global level,” he said.

“E-commerce has been the main driver behind air cargo demand. If you suddenly and dramatically remove the oxygen from that demand, it will cause a seismic shock to the market,” he added.

China-to-US e-commerce shipments alone account for roughly half of the cargo capacity on this eastbound corridor and around 6% of global air freight demand. Amy disruption to this will free up a significant part of this corridor’s cargo capacity and spread its impact to the rest of the market, van de Wouw said.

Chris Clowes, executive director at global supply chain and logistics consultancy, Scala, commented: ”Businesses globally will now have to urgently rethink how and where they source products, redirect trade routes, and renegotiate contracts pretty much overnight. This is especially tough on smaller suppliers who are already working with tight margins and are now facing even more uncertainty and higher costs. Even big manufacturers are finding it tough; adjusting global supply chains isn’t quick or cheap and could lead to plant shutdowns, delayed deliveries, and higher prices at checkout.

“For the UK specifically, the stakes are higher than ever. While it’s not clear yet if the UK will secure any sort of trade agreement, the ripple effects from global tariff hikes are bound to impact the British economy significantly. There’s also a real risk the UK could see a flood of cheaper imports from countries like China, forcing the government to step in and protect key industries like pharmaceuticals, cars, and food production. Even if protective measures are taken, the UK isn’t entirely safe. The real challenge comes from broader global economic conditions, including lower demand and rising inflation, that these tariffs will only worsen.

“Today’s tariff announcement makes it clear that targeted and thoughtful trade negotiations are essential. Policymakers now have to carefully balance the goal of protecting domestic industries against the potential backlash from other countries, which could disrupt entire sectors and create even bigger economic headaches.”

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