De minimis exemptions for China end May 2

The United States is ending de minimis exemptions for China, effective May 2, which will affect e-commerce, a strong driver of the air cargo industry. Under de minimis regulations, companies shipping goods into the United States are not required to pay tariffs on shipments valued at less than $800. Starting May 2, postal items that would previously have been covered by de minimis will be subject to a duty rate of either 30% of their value or $25 per item, whichever is higher. The flat fee will increase to $50 from $25 per item on June 1. President Donald Trump ended de minimis for goods from China in February but reversed the decision a few days later after the increase in parcels requiring formal entry overwhelmed U.S. Customs and Border Protection. This issue has been rectified, according to the White House. “With a one-month runway this time, we can probably expect some rush of last-chance demand and then a significant drop right around the May 2 rollout date,” Judah Levine , head of research at digital booking company Freightos, said in a blog post. “This pattern will likely push rates — as well as possible delays and congestion — up in the coming weeks and then see rates [out of Asia] drop, probably sharply, in May.” “Some e-commerce will likely still go by air, which could prevent a complete rate collapse.” — Judah Levine, head of research at Freightos Ending the de minimis exemption on Chinese imports will cause volumes to drop, Lee Klaskow, senior logistics analyst at Bloomberg, told Cargo Facts . “The end of de minimis and threat of new tariffs could pull forward demand and drive rates higher in the near-term,” he said. “However, reduced demand and more difficult comparisons will lead to weaker rates once the dust settles. “That being said, rates will be volatile to say the least,” he said. DHL expected trade policy shifts and has been preparing accordingly, the express integrator told Cargo Facts . Similarly, UPS’ “flexible global network” has positioned itself to navigate these changes, the company told Cargo Facts . DHL and UPS both said they will work with clients to reduce negative effects and ensure compliance with new regulations. Reciprocal tariffs The United States will also implement reciprocal tariffs April 9, which will likely cause significant supply chain disruptions, increased shipping rates in the short-term and reduced revenue for companies in the air cargo space, analysts said. Trump announced the sweeping tariffs April 2, levying a 10% tariff on imports from every country, beginning April 5. Trump also announced an individualized reciprocal tariff higher than 10% on countries with which the U.S. has large trade deficits, according to the White House. Exceptions to the reciprocal tariffs generally include: Correspondence subject to USC 1702; Steel/aluminum and autos/auto parts already subject to Section 232 tariffs; Copper, pharmaceuticals, semiconductors and lumber; Items that may become subject to future Section 232 tariffs; Bullion; and Energy and minerals unavailable in the United States. A 34% reciprocal tariff has been placed against China, in addition to the 10% tariff that went into effect against the country in February and the additional 10% that was added in March. China responded April 4 that it would impose a retaliatory 34% import fee on American products, beginning April 10. Trump countered today, saying he will impose an additional 50% tariff against China — which would bring the tariff against China to 104%. The following previously implemented tariffs against Mexico and Canada remain unchanged: Goods compliant with the United States-Mexico-Canada Agreement (USMCA) have no tariff; Non-USMCA-compliant goods have a 25% tariff; and Non-USMCA-compliant energy and potash goods have a 10% tariff. Tariff effects on air cargo “These tariffs will likely increase costs across the supply chain , particularly for small and midsize importers, and could slow the movement of goods as shippers reevaluate sourcing and begin to navigate more complex compliance requirements,” Brandon Fried , executive director of the Airforwarders Association (AfA), told Cargo Facts . AfA members have not seen significant changes in air cargo rates on popular routes in recent days but expect to see fluctuations as the tariffs saturate the supply chain, Fried said. On a positive note, the tariffs could incentivize nearshoring and reshoring, limiting the U.S.’s reliance on high-tariff regions for certain goods, Fried said. “The administration feels this shift might lead to a more resilient supply chain in the long term, but there will be significant short-term disruption for forwarders, carriers and importers.” — Brandon Fried, executive director of the Airforwarders Association “These tariffs will likely drive shifts in sourcing, routing and customer expectations,” Fried said. Earnings expectations for parcel carriers like FedEx and UPS will drop the longer the tariffs are sustained, “as the levies' inflationary nature will crimp demand and add operational costs,” Bloomberg’s Klaskow said. The tariffs will likely increase the prices of goods and inflation as well. “Higher tariffs will be working their way through our economy and are likely to raise inflation in coming quarters,” Federal Reserve Chair Jerome Powell said at the SABEW 2025 conference in Arlington, Va., on April 4. Carriers can limit the harmful effects of the tariffs and de minimis elimination by diversifying their routes and remaining flexible , carriers said last month at Cargo Facts Asia 2025 in Shanghai. “Trade is like a flow,” Robert Zhang, commercial director of SF Airlines, said during a panel at the event. “If it is blocked here, then it will go somewhere else.” Still, shippers and forwarders have been “hedging their bets and buying time” before making long-term commitments to air cargo capacity, according to March market data from Xeneta. [caption id="attachment_57150200" align="aligncenter" width="2560"] (Courtesy/Xeneta)[/caption] “In my thirty years working in the airfreight 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. 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.” — Niall van de Wouw, chief airfreight officer at Xeneta Effects on the freighter market The effects the tariffs may have on the freighter and conversion markets remain unclear. “The only light at the end of the tunnel is freighter aircraft tend to do better in times of uncertainty and chaos,” Mikey McBryan, general manager of Canadian carrier Buffalo Airways , told Cargo Facts . “Look at natural disasters, war and COVID.” McBryan expects the demand for narrowbody aircraft to spike as the industry will likely see more short-notice demand for valuable and time-sensitive cargo. “The larger aircraft need for high-volume, cheap freight from overseas might drop off significantly due to tariffs,” McBryan said. “If Temu and its counterparts stop air shipping to the U.S., there will be a lot of aircraft sitting [parked] in the short term.” These tariffs could increase costs for aircraft parts , such as landing gear, Boeing Chief Executive Kelly Ortberg told employees last month, as reported by Bloomberg. Ortberg said his main concern is the tariffs becoming “a continuity of supply issue.” Register now for Cargo Facts EMEA, an essential regional event for industry stakeholders, on May 6-8 at the Shangri-La Bosphorus in Turkey.

De minimis exemptions for China end May 2

Reciprocal tariffs expected to cause supply chain disruptions

Lufthansa Cargo flies A321Fs to KTW to meet automotive demand

First ATR 72-600F conversion on track for June completion

Related Posts

DHL eCommerce signs last-mile deal with USPS

Rhenus Logistics, Katowice Airport, Swissport join Cargo Facts Routes and Airports Conference 2026

Kersti Krepp joins Cargo Facts Asia 2026 as guest moderator

First ATR 72-600F conversion on track for June completion

Cargo Facts Free Newsletters

Cargo Facts Connect Podcast

Follow Us

Welcome Back!

Retrieve your password