Tariffs throw US airfreight into turbulence

The global air cargo industry is facing a period of intense disruption and uncertainty in 2025, driven largely by new and fluctuating tariffs imposed on trade between the United States and China. These trade barriers have roiled supply chains, spiked costs, and forced businesses across the airfreight ecosystem to rethink routes, fleet deployment, and operational strategies.

“Everything is in flux regarding the uncertainty surrounding the tariffs, the fluctuating tariff percentage rate, and the length they will or may remain in place (if at all),” says Joey Smith, Director at Cassel Salpeter. “The potential loopholes and exemption make planning difficult for all participants, especially manufacturers, distributors, and wholesalers.”

Smith notes that companies reliant on transatlantic or intercontinental supply chains have been forced to reexamine everything from inventory management to supplier diversification. “Cargo and last-mile delivery” have also come under pressure, he adds.

The situation is further complicated by “significant frontrunning by manufacturers (specifically Chinese) to get product to US shores before ‘the pause’ potentially expires,” making recent data on air cargo volumes and pricing “unreliable as an overall trend.” On top of this, “looming overhead from a macro perspective is the prospect for rising inflation and slower growth, as evidenced by consumer sentiment souring and slowing too.”

Cost volatility and route rethinking

The tariffs have hit the airfreight industry with particular force, especially in e-commerce, where cost structures and demand patterns have shifted dramatically.

“The elimination of the $800 de minimis exception for Chinese goods, coupled with increased tariffs, is expected to reduce air cargo volumes, especially for low-value e-commerce shipments, which were a major component of Chinese/US traffic,” Smith explains. This change is already prompting a reevaluation of supply chains, with “some e-commerce companies potentially shifting their manufacturing/distribution point of origin to other Asian countries, which may be less affected by tariffs.”

Smith adds that these shifts have caused airlines to reallocate capacity. “We have seen the re-allocation of aircraft from the Chinese/US market to Europe and other regions.”

Calling the tariff imposition a “black swan event,” Smith highlights its unpredictable nature: “The policy shift is protectionism, which is a major blow to globalism and free trade which made USA the largest country by GDP and the wealthiest nation on earth (despite huge trade deficits). Specifically, the greatest damage is uncertainty, as there appears to be no true policy or well thought out goals.”

The consequences extend beyond just trade volumes: “Negative implications could include the reduced demand for freighter aircraft in general, slowing the demand for the expansion of freighter aircraft fleets.” Rising costs and delays in obtaining aircraft parts further exacerbate the challenges, and “freighter aircraft has become more dominant versus belly freight of commercial airlines, so the volatility in the freighter marketplace plays an oversized role.”

Airlines adapt fleet and network strategies

The tariffs have caused a notable disruption to one of the most significant cargo flows globally—the China-U.S. corridor—forcing airlines to reconsider how they deploy fleets and plan networks.

“The traditional airfreight market will not be able to compensate for the decline in e-commerce volumes with the $800 ‘de minimis’ suspension, which was estimated to represent ~1.2 million tons, or over 50% of goods shipped from China to the United States by air,” Smith states. He notes the dramatic shift since 2018, when these shipments made up only 5%.

With “de minimis exemptions unlikely to return,” large Chinese e-commerce companies like Alibaba, Shein, and Temu are “increasingly looking to ship products in bulk via sea to the U.S. or other warehousing locations instead of making individual shipments by plane direct to consumers.”

Smith points to moves already underway in the airline industry: “Several Asia-Pacific airlines said, in financial reports covering the period before the tariffs took effect, they would seek to move capacity to other routes to deal with fluctuating demand.” For example, “Asia-focused freight forwarder Dimerco this month said several scheduled freighter services were cancelled on the China-U.S. corridor, with some capacity rerouted to Mexico and Latin America.”

Approximately 70 freighters ceased flying on Transpacific routes temporarily, though some were redeployed to other markets. Smith sees a silver lining: “New opportunities may be the expansion to additional geographic markets and higher air cargo rates. Alternatively, air freight operators may take proactive measures to mitigate the impact of tariffs by relocating operations to alternative geographic markets.”

This could “create new partnerships with countries not subject to the higher tariffs,” diversifying freight routes and “increasing business for air freight carriers.” “Businesses may become more willing to pay a premium for faster and more reliable air freight/cargo options,” Smith explains, adding that these costs will often be shared along the logistics chain and sometimes passed to consumers.

Maintenance, compliance, and long-term implications

The tariffs’ ripple effects extend deeply into Maintenance, Repair, and Overhaul (MRO) operations, which face new challenges amid shifting customs interpretations.

“It’s too early to tell but suffice it to say that US MROs and aftermarket parts distributors should benefit from the tariff turmoil,” Smith says. However, “inconsistencies in applying Customs rules have led to issues and inconsistencies,” especially regarding whether imported parts must be airworthy to qualify for duty-free treatment. “This is a political hot potato,” Smith notes, with potential inflationary effects throughout the supply chain.

The tariffs have also effectively dismantled exemptions from the 1980 Agreement on Trade in Civil Aircraft—a landmark accord that eliminated tariffs on aircraft and parts among major aerospace nations. “Termination of these exemptions raises production costs for aerospace manufacturers and increases procurement costs for airlines, which could pay more for new aircraft and spare parts,” Smith says.

Smith is skeptical about hopes that tariffs will bring aircraft manufacturing back to the U.S.: “It’s very unlikely.” The aviation sector, still recovering from travel slumps and trade wars, is lobbying for tariff exemptions, fearing disruption to decades of duty-free trade that has supported a $75 billion annual trade surplus. Boeing, heavily reliant on exports, and Airbus, with significant U.S. operations, are both vulnerable to increased component costs.

Balancing rising costs with competitive pressure

U.S.-based cargo airlines face the challenge of absorbing rising import costs while remaining competitive in the global freight market.

“A fuel price drop can be helpful if demand stays relatively strong, otherwise the prospects are harsh and disruptive,” Smith says. One way to reduce costs may be consolidating air and ocean shipments under one customs entry, cutting customs brokerage and processing fees that are poised to rise sharply as de minimis exemptions end.

Smith highlights the marketplace consolidation: “The top 10 cargo carriers represent a significant consolidation in the marketplace of over 2,300 freighters in service, with FedEx the world’s largest with 700 aircraft, followed by UPS, Qatar Airways, Emirates SkyCargo, DHL, Korean Air Cargo, and others.”

In this complex environment, carriers must navigate not only tariff shocks but also shifting demand, cost pressures, and the evolving expectations of a globalized supply chain.

As these tariff-driven changes reshape the airfreight landscape, businesses, airlines, and logistics providers alike are confronting unprecedented challenges. “The lack of clear policy direction and unpredictable duration of tariffs create an unstable environment,” Joey Smith warns. “Only through adaptation, diversification, and innovation can the sector hope to weather this storm.”

Source: https://aircargoweek.com/tariffs-throw-us-airfreight-into-turbulence/