EXTRANS GLOBAL - Air Freight News - Week 23 2025

Air Cargo General

1) Ruling on Unconstitutionality of Trump's Tariffs: Immediate Appeal and Temporary Suspension, Tariffs Remain in Effect

On May 28th local time, the U.S. Court of International Trade (CIT) ruled that all tariffs and executive orders imposed by President Trump under the International Emergency Economic Powers Act (IEEPA) were unconstitutional.
The ruling specifically covers tariffs imposed on China, Canada, and Mexico for reasons including country-specific reciprocity, fentanyl, and border issues. The court held that the tariffs did not address "unusual and special threats to national security," thus failing to meet the preconditions of the IEEPA.
The ruling stipulated that these tariffs would be vacated and permanently enjoined, to take effect immediately without a grace period. However, due to the administration's appeal and the appellate court's approval of a temporary stay, tariff collection has been reinstated.
The appellate process is expected to take several months with multiple procedures. Regardless of the outcome, both the plaintiffs (5 small and medium-sized enterprises + 12 state governments) and the defendant (the Trump administration) may appeal to the Supreme Court.
Analysts believe the first-instance ruling has significantly reduced the risk of tariff escalation and weakened the legitimacy of Trump's hardline measures, such as imposing universal tariffs globally. A former deputy U.S. Trade Representative under the Obama administration stated, "Negotiating nations may delay additional concessions to the U.S. until legal clarity is achieved."
It should be noted that Trump can still use existing laws like Section 232 of the Trade Expansion Act and Section 122 of the Trade Act to impose tariffs on specific countries or goods.
At the temporary stay hearing scheduled for June 9th, if the stay is extended, tariffs will remain in effect until the appellate judgment; if denied, tariff collection will be suspended pending the appellate decision.

2) Apple's India Expansion Plan Hindered by Trump's Pressure

The Trump administration expressed dissatisfaction with Apple's expansion of iPhone production in India, strongly urging the company to boost domestic manufacturing in the U.S.
The U.S. criticized that "iPhones sold in the U.S. should be made in the U.S.," accusing Apple of evading tariffs through Indian production.
Previously, due to rising production costs in China from the U.S.-China trade war, Apple planned to source over 60 million iPhones for the U.S. market from India by the end of 2026.
Indian assembly is primarily handled by Foxconn and the Tata Group. The Indian government has approved a joint venture between Foxconn and India's HCL to establish a core component factory for iPhones, planning to produce 20,000 sets of components monthly starting in 2027.
As of FY25, India has assembled over 40 million units (YoY +60%), accounting for 20% of global iPhone production, with a goal of increasing to over 80 million units by the end of 2026.
Experts note that iPhone production in the U.S. faces challenges of high labor costs, complex supply chains, and a shortage of skilled workers, making short-term implementation difficult.
Bank of America (BoA) predicts that even relocating only the final assembly of the iPhone 16 Pro Max to the U.S. would raise prices by over 25%; 100% U.S. production could triple retail prices.
With Apple currently setting uniform global prices based on U.S. retail prices, any domestic price increase would drive worldwide iPhone price hikes, weakening price competitiveness.
Additionally, most component supply chains are based in China. A U.S. export ban on components could disrupt production and raise costs. To ensure yield rates, engineers and skilled workers from Chinese factories need to install production lines and optimize processes in the U.S., but there is a risk of visa denials by the U.S. government.
India also suffers from a shortage of skilled labor, with current process yield rates below 50%.

3) Recovery of Asian Aviation Cargo Demand?—Freight Rates Rising on Vietnam, Taiwan (China), and Mainland China Routes

Recent fluctuations in U.S.-China tariff policies have added uncertainty to the aviation cargo market, but demand recovery has been observed on some regional routes.
Global cargo aircraft capacity in the third week of May increased by 4% compared to the previous four-week average, with the Asia-Europe route recording the highest growth of 11%. The Asia-Pacific-North America route saw an 8% increase (7% for the westbound Asia-North America sector), and the Middle East-Asia segment also grew by 11%.
Furthermore, intra-Asia demand has remained strong since cargo flight cancellations from late April to early May.
In response to surging Vietnam-U.S. demand, Chinese airlines including China Southern Airlines, Air China, and China Eastern Airlines have introduced "Hanoi-China-U.S." Air to Air (A2A) transshipment services. Analysts believe this service will ease expected capacity shortages for Vietnam-to-U.S. shipments during peak seasons.
Since May 12th, U.S. customer orders have increased, but most are currently handled by sea transport. Aviation cargo demand is expected to recover fully after mid-June.
Notably, the aviation cargo market in Taiwan, China has seen rising freight rates on U.S.-bound routes driven by AI and high-tech demand. Freight rates for air cargo from eastern China to the U.S. have increased by approximately 10%, with some flights expected to be canceled by the end of May.

4) Freight Rate Reference: HKG Departure TAC Index and ICN Departure FSC Update

HKG Departure TAC Index (All-in Price）(including the month - on - month changes in routes and prices of Hong Kong - North America and Hong Kong - Europe)

Recent Trends of ICN Departure FSC (Long-Haul/Mid-Range/Short-Haul)

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