Cathay Pacific expects lower US-China air cargo demand from tariffs impact

SEOUL (Reuters) -Cathay Pacific Airways, one of Asia's largest air freight carriers, expects air cargo demand between mainland China and the United States. to soften as tariff hikes between Washington and Beijing take hold, it said on Wednesday.

It said it will deploy freighters to other routes in response.

"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," the airline group said in a statement.

Based at the world's busiest cargo airport in Hong Kong, Cathay Pacific has benefited in recent years from rising volumes of e-commerce and other air freight out of China.

A "de minimis" exemption on U.S. import tariffs on merchandise valued at less than $800 shipped from China and Hong Kong to the United States, which was used heavily by Chinese e-commerce firms like Shein and Temu, will be removed as of May 2.

Cathay Pacific said changes to trade tariffs may also affect travel demand and increase costs and pressure on supply chains.

(Reporting by Lisa Barrington and Tanishk Kumar; Editing by Himani Sarkar and Gerry Doyle)

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