US businesses use air freight to dodge $157bn in tariff costs

The International Air Transport Association (IATA) this week released a report showing air cargo’s vital role in sustaining global trade and supporting economic growth in 2025 amid severe trade policy uncertainty.

In particular, the report found that air cargo enabled the frontloading of $157 billion in US imports in the first quarter of 2025 and transported more than two thirds of global AI-related goods during the year.

These activities, according to the report, supported global trade growth of 2.4 per cent in 2025, well above the World Trade Organisation’s initial forecasts, while global GDP expanded by 3.2 per cent despite significant policy headwinds.

Commenting on the findings, IATA head of industry analysis Julia Seiermann said that “air cargo is a structural component of global economic resilience”.

She added that, in 2025, it “helped businesses absorb tariff shocks, enabled rapid trade restructuring, and supported the expansion of artificial intelligence (AI) investment”, thereby helping sustain trade and economic growth in a challenging year.

On the frontloading surge, IATA said average applied US tariff rates rose to around 17 per cent in 2025, their highest level since the 1930s, amid frequent policy shifts and rising trade friction. It is also mentioned that many companies used air cargo to pre-empt tariffs by accelerating shipments.

In the first quarter of 2025, US imports rose by $193bn year-on-year, equivalent to a 26 per cent increase.

The surge, the report said, was overwhelmingly concentrated in air transport, with the value of imports carried by air rising 81 per cent year-on-year to $157bn, accounting for 82 per cent of the total first-quarter increase.

At the same time, companies also began restructuring trade lanes to reduce tariff exposure.

According to IATA, US importers shifted sourcing away from heavily tariff-exposed partners, while exporters redirected shipments towards alternative markets, particularly in Europe.

The report said this demonstrated air cargo’s ability to rapidly reallocate high-value and time-sensitive trade in response to policy shocks.

During the April-December 2025 period, air cargo benefited much more from expanding trade lanes than it was affected by those that contracted.

For the US, imports on expanding trade lanes increased by $213bn, of which $174bn, or 82 per cent, was carried by air.

By contrast, imports on contracting trade lanes declined by $257bn, of which $77bn, (30 per cent) was normally carried by air cargo.

In Europe, a similar pattern was observed, with air cargo carrying 48 per cent of gains on expanding lanes but only 3 per cent of losses on contracting ones.

Turning to the AI investment boom, IATA said air cargo played a central role in delivering high-value, time-sensitive equipment such as servers, data storage units and memory chips as AI investment surged in 2025.

In particular, the report said more than two thirds of the value of AI-related trade was carried by air in 2025, while consignments of AI-related goods grew by 20 per cent year-on-year.

It also said AI-related goods accounted for 53.5 per cent of the total value of air-transported trade, while representing just 7 per cent of its volume, underlining the segment’s high value density and strategic importance for the industry.

On this point, Seiermann said that “the rapid increase in demand for AI-related goods in 2025 was met thanks to air cargo”, allowing investment to translate into economic activity rather than being constrained by logistics.

Seiermann concluded that, as economies increasingly and strategically rely on high-value technology goods, “air cargo will continue to play a critical role in ensuring their timely delivery”.