(Reuters) -FedEx shares dropped nearly 6% in premarket trading on Wednesday after the logistics giant sounded caution for the full year ahead and forecast current-quarter earnings below market expectations, as it battles volatile global demand due to pressures from U.S. tariffs.

"The global demand environment remains volatile," said CEO Raj Subramaniam during an earnings webcast, as the company failed to provide full-year earnings and revenue forecasts, pointing to uncertainties surrounding U.S. trade policies -especially on those related to China.

The Trump administration imposed 145% tariffs on China in April, that intensified a global trade war, before reducing them to 30% in May. With FedEx having more exposure to China than rival UPS, the company's executives said they expect tariff policies to continue weighing on the U.S.-China air trade transit.

The biggest hit is from the Trump administration ending duty-free status for direct-to-consumer shipments - valued at less than $800 - from China-linked bargain sellers like Temu and Shein, FedEx Chief Customer Officer Brie Carere said."FedEx is like the economy's Fitbit. Express shows business demand, Ground tracks e-commerce, and Freight reflects industrial strength. Right now, all three are looking sluggish," said Michael Ashley Schulman, partner at Running Point Capital Advisors.

Shares of German logistics company DHL fell nearly 2%, while UPS was down 0.8%.

FedEx and UPS, both bellwethers for the U.S. economy and the logistics sector, have been battling for market share as industrial demand slows, while delivery profits have taken a hit as customers shifted to cheaper ground shipments from costly air services.

The company's outlook overshadowed a better-than-expected profit for the fiscal fourth quarter as it cost cuts and improved export volumes that pushed operating margins higher.

"U.S. manufacturing is still dealing with supply chain and recession worries, global trade isn't moving much, and while FedEx is managing costs well, demand just isn't picking up yet," Schulman added.

FedEx shares trade at 11.63 times their projected 12-month forward earnings, compared to UPS's 13.40.