Air cargo faces a ‘waiting game’ amidst fears of US trade war: IATA

Dubai: The global air cargo industry is entering a period of uncertainty amid growing fears of a global trade war, senior officials at the International Air Transport Association (IATA) said Tuesday.

According to Brendan Sullivan, IATA Global Head of Cargo, “Current trade tensions are deeply concerning. It’s no secret—we believe trade drives prosperity. The more the world trades, the better off we all are.” Sullivan comments at IATA’s World Cargo Symposium, which is being held in Dubai over the next three days, were met with a mix of trepidation and optimism.

Tariffs proposed by the current US administration have marked a sharp escalation in protectionist trade policies in the United States.

President Donald Trump announced a series of steep tariffs on nearly all goods imported to the US, including a 104 per cent hike on all imports from China.

Maja Marciniak, Senior Economist of Policy Analysis at IATA, stated that the industry will "definitely" experience direct impacts from shifting trade flows. These direct impacts could include customs processing delays and changes in aircraft pricing.

Marciniak said, "On the other hand, we might also see indirect effects—broader macroeconomic shifts that influence our industry," she added. Importantly, she explained that the current business uncertainty will likely slow investment and overall economic activity, which will inevitably trickle down and affect the cargo sector.

 “We might see changes to inflation, particularly in the US, but all of this is subject to how the exchange rate acts. The exchange requirements will also be a key indicator, and we might be able to soften the blow a little bit,” she added.

More importantly, the outcome will depend on the actual tariffs that will be implemented. “It will also depend on the governmental responses, and by that, I don't just mean the governmental responses regarding retaliatory tariffs. I'm also interested in the responses regarding investments that various governments might choose to take on,” she said.

Top leaders in the UAE and the global aviation sector have confirmed that, although the possibility of high tariffs is concerning, the industry is prepared to handle and overcome any economic turbulence if these tariffs are reinstated after the US administration's 90-day pause.

The UAE Minister of Economy Abdullah bin Touq Al Marri said, “The air cargo industry today stands at a crossroads. On one hand, we're seeing the sector expand, fueled by surging e-commerce, increasing demand for just-in-time logistics, and new markets for perishable and promising goods.”

He added, “On the other hand, we face a confluence of global challenges: geopolitical volatility, tightening regulations, and the historical imperative to decarbonize, as recently emphasised by the global charter.”

Al Marri said that the World Cargo Symposium takes place at a moment of significant transition for our industry and international trade – “a moment where trade tensions are threatening the international trading system as we know it, a moment that demands innovation, collaboration, and more leadership.” He urged industry leaders to use this forum to forge new partnerships, scale up practical solutions, and turn vision into execution.

Meanwhile, Badr Abbas, Division Senior Vice President of Emirates SkyCargo, said the industry has “faced significant disruptions, making resilience and adaptability top concerns” in recent years.

“It is too early to speculate on the impact of the tariff war. We remain agile and resilient. We view disruption as an opportunity to innovate and remain confident of long-term growth. Demand for our products and services remains high even today. We will continue to monitor the situation closely and adopt swiftly as needed. The US continues to be a strong market for us. We are operating at full capacity as we speak,” Abbas told Gulf News.

“Let us defend globalization, connectivity, and free trade against fragmentation, polarization, and protectionism. We can collectively redefine the sector, not just in terms of goods, but also in opportunity, innovation, and progress,” Al Marri explained.

Willie Walsh, IATA’s Director General also shared sentiments of optimism. The aviation veteran said most of the sector has adopted a ‘wait and watch policy’ concerning the trade war.

“I think it's far too early, because we can't predict any economic analysis. There are so many moving parts that it would be foolish for people to take definitive positions about what would happen,” he said.

“And even if you listen to what the Trump administration has been saying, they've been talking about resetting. It's not that they are talking about stopping everything; they just want to reset their trade with the rest of the world, the trade deficit that they've identified. So, it's far too early to say. It's probably fair to say that there's more negative downside than positive upside, so we'll wait and see,” he stated.

Walsh also said that the industry is “adaptable”, citing the sector’s resilience post-pandemic and ongoing supply chain challenges. “We've been able to operate and grow in an environment where the global economy has not been confident, and our industry will manage our way through. Manage our way through uncertainty from media,” he stated.

Sullivan said that whatever the resolution of current trade tensions is, “we know that air cargo will deliver the goods people need and want.  And to do that it is critical that we remain focused on the fundamental expectations of our customers—that we are safe, operate with modernized processes and are driving towards sustainability,” he said.

Dubai-based aircraft ground handling, cargo, travel, and flight catering services giant dnata said it is prepared for any scenario.

Clive Sauvé-Hopkins, CEO of airport operations, dnata, said there is no change in the situation for the ground handling company due to the global tariffs conflict. “We position ourselves when markets change. We have a global reach with 99 airports across the world in some of the key hubs. We will see some trade flow shifts; we will see where and adopt accordingly,” he said.

dnata on Tuesday said it reached a significant milestone, handling over 1 million tonnes of cargo in Dubai between April 2024 and March 2025 – the highest volume ever processed by the company in 12 months.

Addressing concerns about ongoing trade wars and potential tariffs, particularly in relation to future markets like China and the US, Dennis Lister, Senior Vice President of Product and Innovation at Emirates, acknowledged the uncertainty but affirmed the company's commitment. Lister manages the airline's latest offering - Emirates Courier Express.

"We have a clear strategy of going to China, we have a clear strategy of going to the US," he said. "How these tariffs are going to impact or affect business, we don't know. We have no idea, but it doesn't change our trajectory." He added that it was "too early to tell" if these costs would be passed on to retailers or customers.