Air cargo demand between mainland China and the United States is expected to drop due to the ongoing trade war between the world’s two largest economies, Hong Kong’s flagship airline Cathay Pacific has said.
“We expect a softening of general air cargo demand between the Chinese Mainland and the United States due to the ongoing tariff situation and de minimis rule changes from early May,” Cathay, one of the largest air cargo carriers in Asia, said in a press release on Wednesday.
Washington has imposed 145 per cent tariffs on many Chinese goods, while Beijing has responded with retaliatory duties of 125 per cent on US products.
Trump’s 90 per cent tariffs on parcels valued at US$800 or below from China and Hong Kong will kick in on May 2, closing the “de minimis” exemption in the US.
The US tariffs also apply to products coming from Hong Kong, a former British colony that is long considered a separate customs territory from mainland China.
Cathay’s negative outlook comes despite carrying 10.6 per cent more cargo last month than in March 2024. Cargo tonnage increased by 12 per cent in the first quarter of this year compared with the same period last year, it said.
“We will stay close to the market and monitor the developments vigilantly,” Cathay said in the press release, adding that it would “adapt and redirect our focus to emerging opportunities.”
Meanwhile, US President Donald Trump said on Wednesday that his administration would lower the high tariffs on Chinese products “substantially,” showing signs of a possible de-escalation in the tariff standoff between the two countries.
Trump said the US tariffs “will not be anywhere near that number,” but added that they “won’t be zero.”
Cathay’s passenger volume rose 19.8 per cent last month compared with March last year, the company said. The number of passengers in the first quarter of this year increased 23.4 per cent compared with the same period last year.
Meanwhile, HK Express, Cathay’s low-cost airline subsidiary, carried more than 610,000 passengers in March, marking a 25.4 per cent year-on-year increase year. The quarterly figure showed a 34.3 per cent rise.
