News / Airfreight shippers told to delay contracts as US CBP clarifies China rules

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Shippers should hold off negotiating airfreight contracts until there is more global clarity – although the US has now issued further guidance on entries from China and Hong Kong.

The US Customs & Border Protection (CBP) has confirmed that entry summaries that fail to comply with 1 February’s executive order will be rejected. Non-compliance includes filing entry summaries without the additional duties imposed on Chinese goods.

If an entry is rejected, businesses have two days to resubmit the entry with payment, or face “liquidated damages”.

The update also confirms the reporting requirements when filing the entry summary.

The original executive order imposed an additional 10% tariff on Chinese goods and notes: “For avoidance of doubt, duty-free de minimis treatment under 19 USC 1321 shall not be available.”

The US tariffs are also expected to have a knock-on effect for shippers in other airfreight markets, either because new tariffs will be imposed elsewhere, or because capacity will be impacted.

Expeditors said yesterday: “The tightening of trade restrictions against China is a continuing trend, with the Trump administration focused on Chinese goods rerouted through third-party nations for further export to the US. This effort, although initially focused on Mexico’s auto sector, is poised to broaden.

“The shift in US market share away from China to other major trading partners is expected to prompt US actions, potentially including tariffs and trade agreement renegotiations, as the administration seeks to address the overall trade deficit and compel others to impose barriers against Chinese imports.”

Within this environment, shippers – on any trade lane – are being warned not to negotiate contracts for the year just yet.

Pointing to the freighter capacity that has shifted from the transatlantic to Asia to benefit from ecommerce, Xeneta’s airfreight analyst, Wenwen Zhang, noted that it “demonstrates the importance of shippers being aware of the risks posed by an increasingly complex global trade landscape”.

She added: “The sheer volume of goods being exported out of Asia means any escalation in the US-China trade war could indirectly impact the yransatlantic market.

“A combination of post year-end retail peak season decline, lunar new year factory closures, and Trump’s proposals to remove de minimis exemptions is slowing transpacific air cargo demand. If transpacific capacity loosens, the corridor’s spot rate growth may moderate, reducing the capacity pull from other major corridors, such as the transatlantic.

“Locking-in contracts without built-in contingency plans or flexible terms can lead to missed opportunities for securing lower air freight rates.”

And Ms Zhang warned: “The combination of factors including the removal of de minimis exemptions, potential return of Red Sea container shipping, and airlines’ seasonal capacity adjustments mean shippers could benefit from postponing negotiations for new contracts until Q2.

“Doing so could secure more competitive rates if the geo-political situation and markets turn in their favour.”

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