Impact of De Minimis Changes on Air Cargo Dynamics Between China and the U.S

As reported by Reuters, air cargo traffic from Asia to north America saw a significant decline of almost 11% year-over-year in May. This downturn is largely attributed to the impact of the Trump administration’s recent move to eliminate duty-free exemptions for low-value shipments, which has shaken China’s e-commerce sector.

The U.S. government put an end to de minimis exemptions for shipments from China and Hong Kong on May 2. Previously, packages valued at $800 or less could enter the country without incurring duties. Following this change,there was a staggering 43% drop in low-value e-commerce shipments from China to the U.S. between April and late May.

Retail giants like Shein and Temu had relied heavily on these exemptions, sending millions of duty-free parcels daily into American markets.According to estimates from Xeneta,e-commerce represented about half of all air cargo movements between China and the U.S. before this policy shift.

Initially facing steep tariffs as high as 120% after May 2, these rates where later reduced to 54% on May 14 during a temporary pause on broader tariffs against Chinese imports.Data shared wiht CNBC revealed that Temu experienced a dramatic drop in daily active users—down by 52%—from March through May; Shein wasn’t far behind with a decrease of 25%. Both companies have also slashed their advertising budgets considerably in the U.S., with Temu cutting back by an astonishing 95% year-over-year in May and Shein reducing its spending by about 70%.

Looking ahead, starting in 2027, all countries will lose their de minimis exemptions under President Trump’s “One Big Gorgeous Bill Act,” enacted on July Fourth. Notably, Customs and Border Protection data indicates that around three-quarters (76%) of de minimis shipments recorded in early 2024 originated from China alone. The United States has historically maintained one of the highest de minimis thresholds globally at $800; for comparison’s sake, Europe sets its limit at €150 (approximately $175), while the UK caps it at £135 (around $183).