US President Donald Trump's order eliminating a duty-free status for low-value e-commerce shipments from China, Mexico and Canada stands to ruin air cargo prospects for many international trade, reports New York's FreightWaves.

Chinese and US marketplaces like Shein, Temu, AliExpress, Amazon and Shopify also could be significantly constrained as a result.

The US imported more than 2.5 million tons of cargo by air from China last year, including about 1.3 million tons of cheap e-commerce products that are potentially impacted by the US decision to close the trade privilege.

Electronic retailers, logistics service providers, express carriers, customs brokers and others are scrambling to understand the new rules and how to reorient workstreams accordingly.

Companies knew changes were coming after the Biden administration in mid-January gave notice that cheap imports would lose duty-free status if they are subject to tariffs or national security restrictions, a move that primarily targeted China.

The difference is that Trump invoked rarely used emergency economic powers, on the premise of stopping fentanyl smuggling, to implement an immediate and all-encompassing ban.

The de minimis provision under US trade law exempts goods valued at US$800 or less shipped to a single person per day from duty and taxes, and most of the information needed for a formal customs entry.

Large online retailers, led by Shein and Temu in China, took advantage of the provision in 2023 to avoid import taxes by shipping direct to consumers instead of to US agents.

The model relies almost entirely on airfreight. Chinese e-tailers kept planes full by renting entire freighters and reserving blocks of space on commercial aircraft to meet customer promises for fast delivery.

In the process, e-tailers rescued the air cargo sector from a recession and pushed it to 12 per cent growth last year. As the e-commerce surge accelerated in the fall of 2023, air cargo rates from China to the United States climbed to more than $6/kg and stayed in the $5-to-$7 range last year, before dipping after the peak season.

E-commerce now accounts for one-fifth of air freight volume and more than 50 per cent of air cargo volumes out of Asia.

"We can expect to see these companies begin shipping most items in bulk rather than single parcels, which will reduce speed to market and increase the amount of inventory held in the US. This could mean a permanent shift from air freight to ocean shipping," said Tony Pelli, director of supply chain resilience at BSI Consulting, by email.

Demand from Chinese e-commerce sellers has been so great that it squeezed traditional users of air cargo, such as automotive, pharmaceutical and electronics manufacturers, who had difficulty finding capacity at reasonable prices.