*

Air cargo demand from Asia to North America fell 10.7% in

May,

IATA reports

*

Low-value e-commerce shipments from China to US fell 43%

in May,

Aevean estimates

*

E-commerce platforms shift focus to Europe and

Asia-Pacific,

Rotate consultancy notes

By Casey Hall and Lisa Barrington

SHANGHAI/SEOUL, July 4 (Reuters) - Air cargo shipment

volume from Asia has declined by double digits since the U.S.

cancelled a tax-free exemption for low-value packages from China

early in May, trade groups and analysts said.

Air cargo demand from Asia to North America declined 10.7%

in May versus the same month a year earlier, showed data from

the International Air Transport Association, illustrating "the

dampening effect of shifting U.S. trade policies," IATA Director

General Willie Walsh said in a report published on Monday.

Shipments valued under $800 - often sent by air to U.S.

customers of low-cost e-commerce platforms such as Shein and

PDD's Temu - fall under the so-called de minimis, or

too-small-to-matter, tax exemption.

Since May 2, however, such shipments sent from China and

Hong Kong have been taxed at a rate initially as high as 145%

before settling to as low as 30% after a mid-May trade detente

between the U.S. and China.

The pair continue to negotiate on trade, with the U.S.

relaxing export restrictions on software, ethane and aerospace

to China this week, ahead of July 9 when the U.S. plans to

re-impose a range of steep tariffs targeting multiple countries.

The volume of low-value e-commerce shipments from China to

the United States in May saw a particularly steep decline,

industry experts said.

Such shipments fell 43% in May from the previous month,

showed estimates from air cargo consultancy Aevean, but rose to

other main export markets including Europe and South-East Asia.

It is not clear whether such dramatic declines will

continue, said Aevean Managing Director Marco Bloemen, given

businesses had anticipated the de minimis halt and because the

tariff rate was lowered mid-month.

"Will those e-commerce players bounce back to the U.S. now

they're paying 30% duties instead of zero duties?" Bloemen said.

Companies turning to other markets due to U.S. trade policy

uncertainty is also likely weighing on shipment volume, he said.

"That's a trend that we're expecting to continue - there's

more Europe-destined e-commerce expected in the month of June,

also to markets like Latin America."

Air cargo consultancy Rotate said e-commerce platforms were

focusing on other markets to replace lost U.S. demand, with

significant export growth to the European Union and Asia-Pacific

region.

Shein and PDD did not immediately respond to Reuters'

requests for comment.

CARGO CUT-BACKS

Low-value e-commerce out of Asia has been taking an

increasing proportion of global air freight and boosting

airlines' cargo businesses.

Last year such shipments - at 1.2 million metric tons - made

up 55% of goods shipped from China to the U.S. by air compared

to just 5% in 2018, Aevean data showed.

As Asia-to-U.S. demand fell in May, airlines pulled

freighter aircraft off trans-Pacific routes and placed them

elsewhere, industry experts said.

Some of that demand has now returned as companies take

advantage of tariff pauses between the U.S. and a number of

countries, but flight frequencies are reduced, they said.

"Some of the larger players that were chartering three

flights a week have cut back to two," said e-commerce

consultancy Cirrus Global Advisors.

Direct freighter capacity between China and the U.S. in June

was 11% lower compared to March, wiping out growth in capacity

over the past year on those lanes, Rotate data showed.

Asia-focused freight forwarder Dimerco Express

estimated its e-commerce bookings were down 50% in May and June.

As a result, scheduled freighter flights continue to be

cancelled, it said in a report.

The de minimis rule, which dates to 1938, had been a target

of criticism from American lawmakers as a loophole that lets

Chinese products skirt U.S. tariffs and allows illegal drugs and

precursors to make opioid fentanyl to enter the U.S. unscreened.