Air shipments from Asia to the US plummet after the end of the exemption for packages from China.

SHANGHAI/SEOUL, July 4 (Reuters) – The volume of air shipments from Asia has fallen sharply since the United States canceled, in early May, the tax exemption for low-value packages from China, according to trade groups and industry analysts.

Demand for air cargo from Asia to North America fell 10,7% in May compared to the same month of the previous year, according to data from the International Air Transport Association (IATA). For the organization's director-general, Willie Walsh, the figures illustrate "the weakening effect of changes in US trade policies," as stated in a report published on Monday.

Packages valued at less than US$800 — typically shipped by air to U.S. customers on low-cost e-commerce platforms like Shein and Temu, owned by PDD — were exempt from taxes under the so-called de minimis rule, which waives taxation because they are considered to be of negligible value.

Since May 2nd, however, these packages shipped from China and Hong Kong have been subject to tariffs that initially reached 145%. After a trade truce between the US and China in mid-May, the tariffs were reduced to as low as 30%.

The two countries continue to negotiate trade issues. This week, the United States eased export restrictions on software, ethane, and aerospace products to China, ahead of the scheduled date of July 9, when they are expected to reimpose a series of high tariffs on several countries.

IATA released global air cargo market data for May 2025, showing a 10,7% drop in trade between Asia and North America.

Industry experts have pointed out that the volume of low-value e-commerce shipments from China to the United States has fallen particularly sharply. Estimates from the airline consultancy Aevean indicate that these shipments fell 43% in May compared to the previous month. In contrast, there was an increase in exports to other key markets, such as Europe and Southeast Asia.

Aevean's managing director, Marco Bloemen, stated that it is still unclear whether this decline will be sustained, considering that companies were already expecting the end of the de minimis rule and that the tariff was reduced throughout the month. "Will these e-commerce companies return to the US market now that they are paying 30% tax instead of zero?" he questioned. According to him, the redirection to other markets due to uncertainty about US trade policy also weighs on the volume of shipments.

"This is a trend we expect to continue — more e-commerce destined for Europe is expected in June, including markets like Latin America."

Platforms redirect focus

The airline consultancy Rotate reported that e-commerce platforms have been focusing their efforts on alternative markets to compensate for lost demand in the United States, with a significant increase in exports to the European Union and the Asia-Pacific region.

Shein and PDD did not immediately respond to requests for comment from Reuters.

Cuts in freight transport

Low-value e-commerce from Asia is capturing a growing share of the global air freight market, boosting airline business. According to data from Aevean, these shipments—which totaled 1,2 million tons in 2024—accounted for 55% of products shipped from China to the US by air, compared to just 5% in 2018.

With the drop in demand from Asia to the United States in May, airlines withdrew cargo planes from transpacific routes and relocated them to other regions, according to industry experts. Some of that demand has already returned with the tariff truce between the US and some countries, but the frequency of flights has been reduced.

"Some of the largest operators, who used to charter three flights a week, have reduced that to two," said e-commerce consultancy Cirrus Global Advisors.

Data from Rotate shows that direct freighter capacity between China and the US in June was 11% lower than in March, erasing the growth recorded on these routes over the past year.

Logistics company Dimerco Express (5609.TWO) estimated that its e-commerce bookings fell by 50% in May and June. As a result, scheduled cargo flights continue to be canceled, according to a company report.

The de minimis rule, in effect since 1938, had been the target of criticism from US lawmakers for allowing Chinese products to evade US tariffs and for facilitating the entry of illegal drugs and precursors for the production of the opioid fentanyl without oversight.

Reported by Casey Hall and Lisa Barrington; edited by Christopher Cushing