IATA has warned that an escalation in global trade tensions could moderate the strong outlook for long-term passenger and freight demand, but is unlikely to trigger a major crisis for the world’s airline industry.
In a recently released research note, IATA Economics says moves towards global trade protectionism are not positive for air transport, however at this stage the impact appears to be minimal.
“The overall scale of the economic damage depends on both the extent and the severity of any tariffs and other restrictions that are put in place,” it adds.
The United States’ tariffs on steel and aluminium have had minimal impact on air freight as those goods rarely travel by air. The 10% tariffs on car parts and semiconductors made in China are of concern as they are goods usually shipped by air. However, the value of most exports into the US of those goods come from Canada and Mexico, and thus the impact on air freight is lessened.
Nonetheless, IATA sees a “key risk” for air freight if an escalated trade war leads firms to reconsider their supply chains, potentially reinforcing the trend of “reshoring” that has been ongoing since the 2008 global financial crisis…