To Beat Trump Tariffs, Air Cargo Imports At Highest Percentage Ever

Air cargo this year is accounting for the largest percentage of U.S. imports it ever has, fueled by uncertainty over President Trump’s unsettled trade policy.

Since December, the month after President Trump’s re-election, air cargo imports have accounted for more than 30% of all U.S. imports five consecutive months, according to my analysis of the latest U.S. Census Bureau data.

The percentages registered in those five months are among the eight highest over the last 250 months. The other three were during an equally unsettled time: the Covid-19 pandemic in the spring of 2020.

This time around, the apex, at least for now, appears to have been March, as Trump’s pending April 2 Liberation Day tariffs, which were ultimately paused for 90 days after bond markets shuddered, approached.

The March air cargo percentage – 38.91% of all U.S. air cargo, ocean cargo and land cargo imports – was remarkable for two reasons.

First, it was the highest percentage on record for air cargo in a single month, narrowly topping the May 2020 total of 38.58% as the Covid-19 pandemic was sweeping the United States and the world.

Second, it is the only month in which the value of air cargo surpassed the value of ocean cargo.

Ocean cargo is traditionally the dominant mode of transportation for all trade, including imports, by value. On the import side, the focus of this column, the percentage is generally above 40%.

The primary advantage for ocean cargo over air cargo is that it is less expensive. It is also the better solution for heavier cargo. The primary disadvantage? Speed. Although less pronounced, air has the same advantages over land-based cargo.

Through the first four months of the year, air cargo is accounting for a greater percentage of U.S. imports by value than land-based cargo, which comes from Mexico and Canada, the United States’ two largest trade partners for total trade and imports.

It is neck and neck with the percentage being shipped by ocean, with 37.88% ocean cargo and 35.61% air cargo. Land-based cargo, which includes truck, rail and pipeline, is accounting for 26.51%, slightly below the 2020 total.

Here, I am intentionally using value rather than tonnage, a measure generally used within both the air and ocean industries since their revenue rates are set by weight. I do so for two reasons. First, planes, whether all-cargo “freighters” or passenger planes carrying “belly cargo” underneath, can’t transport anything approaching the weight of today’s post-Panamax ships. Second, the U.S. Census Bureau does not release complete or reliable statistics on land-based tonnage for our two largest trade partners, Mexico and Canada, whether by truck, train or pipeline.

What guidance can I offer about what it means?

On inflation

While the extra demand on air cargo might have strained supply chains, it will not necessarily directly contribute to any inflation that might result or have resulted from the global tariffs Trump announced on April 2, paused until July 8 as of this writing, or other tariffs threatened or imposed. That’s because the increased percentage appears to largely be driven by additional cargo already relying on air. Air is generally used by lightweight and expensive cargo, things like pharmaceuticals, cell phones, gold and computer chips. While it might not add inflationary pressure directly, it might add pressure indirectly since those imports that were “front-loaded” to beat tariffs that were ultimately paused, in so many cases, will need to be stored in warehouses, in some cases climate-controlled warehouses and might have incurred additional shipping costs once landed. The maxim for so long in international trade has been to remove all sand from the gears.

Why now?

Certainly the tariffs and threats of tariffs led to the spike in the import percentage in recent months. But air cargo’s percentage has been creeping up slowly for years, given the cross-border trade in expensive medicines and medical devices that solve previously unsolvable ailments and illnesses; computer chips that power an increasing array of our life’s work and play; and gold which is increasingly of interest not just to Americans and Europeans but Middle Easterners and Asians as well.

Where from here?

That’s a tough one. We are more than 60 days into the 90-day pause of the April 2 tariffs on the world. That includes a baseline 10% tariffs on the world’s nations, most of which we actually have a trade surplus with, as well as higher tariffs on some countries. Despite Trump’s optimism that the United States could strike deals with the rest of the world during the 90-day pause, not one deal has been completed yet. Then there’s the courts. They are reviewing Trump’s power to issue these tariffs as he did, a fight destined to find its way to the Supreme Court. And then there’s the bond market, which reacted so strongly to the April 2 announcement that Trump paused the tariffs within 24 hours. But keep in mind that Trump, like Houdini, is good at boxing himself in and escaping.

Additional risks?

Yes. Trump is unpredictable. The boom in March trade led to a significant drop in April, particularly in imports. Air cargo still accounted for more than 30% of all U.S. imports but dropped to 31.47% from the record 38.91% referenced above. My guess is that the May data, when released in a few weeks, will show some additional slowing in the percentage of U.S. air cargo imports, more toward historical norms, and an overall slowing of U.S. trade, which is running at record levels across the board. What are manufacturers and importers thinking now, with less than a month until the end of the pause? We won’t know for certain until the June data is released, until early August. And lacking a Trump announcement of a global extension in the pause in the next week or so, who can claim to know? Do you bet the bond market will keep Trump in check?

Bottom line: Uncertainty extends beyond Trump’s tariffs into the supply chain itself, into when and what cargo is shipped how, forcing the logistics industry to fall back on lessons learned during the Covid-19 pandemic in Trump’s first term.