The Biden administration’s decision to eliminate tariff free access for low value imports from China and Hong Kong, combined with a sweeping 145% tariff on Chinese goods, could devastate the air cargo sector and cripple thousands of small online businesses reliant on direct-to-consumer sales, according to a new analysis by supply chain experts.
Derek Lossing, founder of Seattle-based consultancy Cirrus Global Advisors, warned that the policy shift effective May 2 would trigger a $22 billion revenue loss for airfreight operators over three years. The forecast hinges on plummeting demand for Chinese e-commerce platforms like Temu and Shein, excess airline capacity, and downward pressure on shipping rates. Major cargo carriers, including Atlas Air and Apex Logistics, as well as Amazon and smaller brands, are expected to face significant financial strain.
“The direct-to-consumer model from China is collapsing under these tariffs,”According to Lossing. “Airlines will be forced to retire older freighters or shift assets to other markets, creating a ripple effect of oversupply and lower rates globally.”
E-Commerce’s Dominance in Air Cargo at Risk
E-commerce shipments account for 50–60% of air cargo volumes between China and the U.S., and 20% globally, according to the International Air Transport Association. However, Lossing’s analysis predicts a 30% revenue drop on the China-U.S. trade lane due to reduced volumes and yield compression.
The policy changes dismantle the “de minimis” exemption, which previously allowed duty-free entry for shipments under $800 per person daily. Starting May 2, retailers must file formal customs declarations for each parcel—a costly, time-intensive process that experts say will deter consumers.
“Asking shoppers to provide sensitive personal data for customs forms during checkout will kill conversions,” Lossing said in a LinkedIn post. “The friction and privacy concerns could slash cross-border sales far beyond current projections.”
Price Hikes and Logistics Chaos
Temu and Shein have already announced U.S. price increases ahead of the tariff rollout, sparking a surge in last-minute orders. Meanwhile, logistics providers like FedEx are tacking on a 45-cent-per-pound surcharge for Chinese airfreight as companies rush to offload inventory before the May 2 deadline.
Smaller sellers face existential risks. The National Foreign Trade Council estimates that processing fees and tariffs could double the cost of a $50 package, with customs paperwork alone adding $31 per shipment. Lossing emphasized that tens of thousands of Chinese micro-sellers on Amazon lack the resources to pivot to traditional bulk shipping models.
“Many will fold or shift operations to countries like Vietnam to avoid tariffs,” he said.
Global Domino Effect
The European Union’s potential repeal of its $170 de minimis threshold could compound losses for air cargo operators. Lossing warned that a “one-two punch” of U.S. and EU restrictions might push revenue declines beyond current estimates.
While large platforms like Temu are building U.S. warehouses to bypass tariffs, smaller players cannot absorb the costs. Aaron Rubin, CEO of logistics software firm ShipHero, noted that the new customs hurdles would force all businesses to adopt bulk shipping models.
“Asking for customer data at checkout is a nail in the coffin for direct-to-consumer sales from China,” Lossing said.
Political Uncertainty Looms
The Trump administration’s threat to eliminate de minimis benefits for all countries—not just China—adds further uncertainty. However, analysts caution that abrupt policy reversals could soften the blow.
“The only silver lining is that airfreight rates may drop 30–40% on China-U.S. routes, saving about $1 per parcel,” Lossing added. “But that’s cold comfort for an industry facing billions in losses.”
Bolbuk News Insight:
The tariff overhaul marks a seismic shift in global e-commerce, favoring large corporations with U.S. logistics networks while endangering small sellers. With air cargo revenue and consumer prices in the crosshairs, the long-term fallout could reshape trade dynamics far beyond China.
For continuous updates on this developing story, stay tuned to Bolbuk News.