President-elect Donald Trump said that he would impose import tariffs on all three major U.S. trading partners on his first day in office on January 20. A 25% tariff will be imposed on all products entering the U.S. from Canada and Mexico, and an additional 10% tariff will be imposed on all goods from China. He stated that the purpose of the tariffs is to prevent drugs and illegal immigrants from pouring into the U.S. through its borders, and the reason for imposing tariffs on China is that fentanyl is smuggled into the U.S. in large quantities.
China’s civil aviation hit a “record high” in air cargo volume in the first nine months of 2024.
Between January and October 2024, the Civil Aviation Administration of China recorded about 7.3 million tons of cargo and mail transport, up 19.3% from 2019. This historical peak was driven by strong growth in international air cargo, with cargo volumes to export destinations surging 48.5% to 2.93 million tons, and cargo flights to international destinations in the last week of November up 100.4% year-on-year.
As the haze brought by tariff issues grows, people are concerned about whether China’s air cargo industry can continue to prosper in the long term. At present, the number of cross-border e-commerce packages exported from China by air transport has exceeded 10,000 tons per day, and at least one-third of these packages go to the US market.
The huge volume of e-commerce parcels has created a huge demand for air cargo in the past three years or so, which has led to a high shortage of cargo aircraft resources worldwide, resulting in frequent shortages of aircraft and unprecedentedly high expectations of price increases by airlines.
In the future, e-commerce platforms may choose some adjustment strategies under the impact of Trump’s tariff policy. For example, fast fashion products operated by globally influential e-commerce platform companies such as SHEIN and TEMU. The reason why these platform companies have been able to achieve rapid revenue growth in the past is partly due to the low-cost transportation capabilities they have secured for consumers.
However, since the source of their supply chains is mostly in China, they may face stricter review procedures or higher tariff burdens under the influence of Trump’s tariff policy.
Mexican President Claudia Sheinbaum said that Trump’s threat to impose tariffs may trigger inflation and cause unemployment in both countries. She plans to write to Trump to request cooperation rather than impose tariffs, rather than simply and crudely impose tariffs. Judging from trade data, Mexico is currently the largest trading partner of the United States. In September, the total trade between the two countries reached US$72.5 billion, an increase of 8% year-on-year compared with the same period last year.
On the Canadian side, officials have also expressed concerns about Trump’s tariff policy, making it clear that the 25% tariff will be a devastating blow to workers and jobs in both Canada and the United States. In September, Canada’s trade with the United States ranked second at $63.8 billion.
Canadian officials also said that tariffs could harm their own economy.
Trump’s tariff measures have undoubtedly triggered reflections on the long-term sustainability of China’s recent air cargo boom. If the tariff policy is officially implemented and continues for a long time, China’s air cargo industry may face challenges.
On the one hand, e-commerce goods and fast fashion products shipped to the United States may reduce transportation demand due to the sharp increase in costs, resulting in a decline in freight volume.
On the other hand, related companies may re-arrange their supply chains and look for other alternative markets or transportation methods, which will also have a profound impact on the market share and operating model of China’s air cargo industry.
