The US has today implemented a range of tariffs on more than 60 countries, with China facing rates of 104%.
In response, China has announced tariffs on US imports of 84%. Other countries hit by US tariffs include Japan at 24%, Vietnam at 46%, Taiwan at 32% and the European Union at 20%.
The European Union has responded with 25% tariffs on €21bn worth of US goods.
The US has also implemented a 25% tariff on autmobiles that started last week, along with a 25% tariff on automobile parts due to come into force in May.
Also in May, the US is set to end the de minimis exemption for Chinese e-commerce parcels, which have fuelled much of the air cargo market’s growth over the past few years.
The air cargo market is tentatively watching the situation unfold, but most industry observers expect tariffs to push up prices and result in lower consumer demand and therefore air cargo volumes.
“Already reeling from the potential impact of the US’ actions, global air cargo demand is likely to suffer further harm from retaliatory actions by other countries,” said Xeneta in a market wrap up last week.
Rate portal Freightos said the tariffs were creating uncertainty: “In addition to roiling markets and increasing the likelihood of recession, the plan is also leading to significant uncertainty and confusion for supply chains in terms of understanding the moves as protectionist or aimed at removing foreign trade barriers, as long-term or temporary.”
It added that the air cargo market had benefited from a rush of demand in the last couple of weeks as importers sought to beat the implementation of tariffs and there could be a further rush in May ahead of the automobile part and e-commerce changes.
TAC Index reported that e-commerce Block Space Agreements for as soon as May were being cancelled, although rates out of May were still on the rise last week.
TAC editor Neil Wilson wrote last week that the constant changes to tariffs was making it difficult for companies to plan ahead.
“All of this has also made it more difficult for market participants – including airlines, forwarders, and shippers – to plan ahead with confidence,” Wilson said.
“That is also before taking into account the potential responses of other trading partners – and all the uncertainties about that. In the meantime, a more pessimistic mood about the global economy has taken hold – with expectations of US growth falling.”