Cathay Pacific Warns of Declining US-China Cargo Demand Amid Tariff Hikes

Cathay Pacific Airways, a leading Asia-based air freight carrier, anticipates a downturn in air cargo demand between mainland China and the United States due to escalating tariffs and regulatory shifts. The Hong Kong-based airline said it will adjust its freighter deployments to alternative routes in response to these developments.

In a statement released Wednesday, Cathay Pacific cited the upcoming removal of the U.S. "de minimis" tariff exemption for goods under $800 shipped from China and Hong Kong, set to take effect on May 2, as a major factor. This rule had been widely used by Chinese e-commerce giants such as Shein and Temu to ship low-cost merchandise to American consumers without incurring import duties.

The airline, which operates out of Hong Kong International Airport—the world’s busiest cargo hub—has experienced significant growth in e-commerce and air freight from China in recent years. However, the new U.S. trade policies are expected to dampen that trend.

“General air cargo demand between the Chinese mainland and the United States is likely to soften due to the ongoing tariff situation and de minimis rule changes,” the airline noted.

Cathay Pacific also warned that these trade policy changes could affect travel demand, raise shipping costs, and further strain global supply chains. As geopolitical tensions continue to mount between Washington and Beijing, airlines and logistics providers are bracing for disruptions across major cargo corridors.

By proactively reallocating resources to other high-demand routes, Cathay Pacific aims to minimize the impact and maintain efficiency amid shifting global trade dynamics. The airline’s strategy highlights growing uncertainty in cross-border logistics and the need for adaptability in the global air cargo sector.