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The recent U.S. decision to eliminate the longstanding tax exemption on low-value imports from China has triggered a sharp decline in air cargo volumes between Asia and North America. This policy shift, effective from May 2, 2025, marks the end of the “de minimis” tax exemption — a provision that previously allowed packages valued under $800 to enter the U.S. duty-free.
Key Impacts on Air Cargo and E-Commerce Trade
The International Air Transport Association (IATA) reported a 10.7% year-over-year drop in air cargo demand from Asia to North America for May 2025, signaling the disruptive impact of the new tariff regime.
Data from air cargo consultancy Aevean indicates a 43% decline in low-value e-commerce shipments from China to the U.S. during the same period. This category, once accounting for 55% of Chinese air freight to the U.S. by weight in 2024, has experienced a pronounced contraction.
Meanwhile, e-commerce companies are pivoting to alternative markets in Europe and the Asia-Pacific region. Consultancy Rotate notes a strategic shift by platforms such as Shein and PDD, directing exports away from the U.S. due to heightened duties, which initially soared to 145% before easing to 30% after mid-May trade negotiations.
Background on the De Minimis Rule Change
The “de minimis” rule, in effect since 1938, exempted low-value shipments from customs duties and inspections. However, it faced intense scrutiny from U.S. lawmakers amid concerns over tariff evasion and the unchecked entry of illicit goods, including opioids such as fentanyl.
Since the May 2 enforcement, shipments valued below $800 from China and Hong Kong are subject to tariffs ranging from 30% to 145%, disrupting established cross-border e-commerce flows.
Market Reactions and Future Outlook
Airlines have responded by cutting back freighter capacity on trans-Pacific routes, with some reducing scheduled flights by over 10% compared to earlier in the year. Freight forwarders report booking declines exceeding 50% for May and June.
While a temporary tariff reprieve between the U.S. and China has alleviated some pressures, analysts remain cautious. Uncertainty in trade relations and evolving U.S. tariff policies encourage businesses to reorient supply chains toward Europe, Latin America, and Asia-Pacific markets.
Marco Bloemen, Managing Director at Aevean, noted:
“The fundamental question is whether e-commerce players will resume U.S. shipments despite new tariffs. Current trends suggest continued market diversification.”
Implications for Tax and Trade Compliance Professionals
This policy shift underscores the growing complexity of customs and import tax compliance in global trade. Tax and customs advisors should anticipate:
- Increased scrutiny of low-value imports.
- Need for revised customs valuation and duty management strategies.
- Potential reconfiguration of supply chains to optimize tax efficiency and compliance risk.
The U.S. termination of the low-value goods tax exemption represents a critical turning point in North American trade dynamics, with significant repercussions for air freight, e-commerce, and tax compliance across borders.
Stakeholders from multinational corporations to SMEs must adapt quickly to the evolving tariff landscape to mitigate disruptions and maintain competitive positioning.
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