Cathay Pacific Anticipates Air Cargo Demand Decline Due to Tariffs

SEOUL: A leading Asian air freight carrier, Cathay Pacific Airways, predicts a reduction in air cargo demand between mainland China and the United States as tariff increases between Washington and Beijing take effect. The company announced on Wednesday that it would redirect its freighters to alternative routes in response to these changes.

In a released statement, the airline group stated, “We anticipate a softening of general air cargo demand between mainland China and the United States due to the ongoing tariff situation and changes to the de minimis rule implemented from early May.”

Impact of E-commerce

Based in Hong Kong, home to the world’s busiest cargo airport, Cathay Pacific has seen considerable gains in recent years from increasing e-commerce volumes and other air freight originating from China.

De Minimis Exemption

The United States is eliminating a “de minimis” exemption on import tariffs for merchandise valued at less than $800 shipped from China and Hong Kong. This exemption, which was widely used by Chinese e-commerce businesses like Shein and Temu, ceased on May 2.

Cathay Pacific also noted that alterations to trade tariffs could potentially impact travel demand, increase expenses, and exert pressure on supply chains.