The United States has implemented sweeping tariffs on over 60 countries, with China bearing the brunt at a staggering 104% tariff rate. This move is part of a broader trade policy shake-up that has triggered swift retaliatory measures and heightened tensions across global markets.
China has responded with 84% tariffs on U.S. imports, escalating the trade conflict. Other nations affected by the U.S. tariffs include:
Japan: 24%
Vietnam: 46%
Taiwan: 32%
European Union (EU): 20%
The European Union, in turn, has imposed 25% tariffs on €21 billion worth of U.S. goods, further intensifying trade disputes.
The U.S. recently introduced a 25% tariff on automobiles, which took effect last week, with a similar tariff on auto parts scheduled for implementation in May. Adding to the strain, the U.S. plans to terminate the de minimis exemption for Chinese e-commerce parcels in May—a significant blow to the air cargo market, which has relied heavily on e-commerce-driven growth in recent years.
The air cargo industry is closely monitoring these developments, with many experts predicting a decline in consumer demand and air cargo volumes due to increased prices.
“Global air cargo demand, already vulnerable to the U.S. actions, is expected to suffer further harm from retaliatory measures by other nations,” Xeneta noted in a recent market analysis.
Freightos, a leading freight rate portal, highlighted the uncertainty caused by these tariffs:
“In addition to roiling markets and increasing the likelihood of recession, the plan is creating significant confusion for supply chains. Questions remain about whether these measures are protectionist or aimed at removing foreign trade barriers, and whether they are long-term or temporary in nature.”
Despite these challenges, the air cargo market has seen a short-term surge in demand, as importers rush to beat the tariff deadlines. This trend may continue into May, ahead of the upcoming changes to auto part tariffs and the e-commerce exemption.
However, the constant shifts in tariff policies are complicating forward planning for airlines, freight forwarders, and shippers. According to the TAC Index, e-commerce Block Space Agreements scheduled for May are already being canceled, although rates for May shipments were still rising as of last week.
Neil Wilson, editor of the TAC Index, expressed concern over the planning difficulties posed by the volatile trade environment:
“The frequent changes to tariffs make it challenging for market participants—including airlines, forwarders, and shippers—to plan ahead with confidence. This is compounded by the uncertainty surrounding the potential responses of other trading partners. Meanwhile, pessimism about the global economy is deepening, with expectations of U.S. growth declining.”
As the global trade landscape continues to evolve, air cargo stakeholders face mounting uncertainties and disruptions. The combined effects of escalating tariffs, retaliatory measures, and shifting economic expectations are reshaping market dynamics, underscoring the need for agility and adaptability in the months ahead.
Source: https://www.aircargonews.net/supply-chains/air-cargo-braces-as-us-hits-china-with-tariffs-of-104/1079939.article
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