The medium-term outlook for global air cargo demandremains strong, but the industry is watching several key variables that could have major implications on air freight trends, including how the escalating tariff battle between the US and China might affect shipping patterns.
IATA, in its latest five-year forecast, sees global freight-tonne kilometers (FTKs) growing at 4.9% annually through 2022, bolstered by “a stronger economic and trade backdrop” than industry had during much of the 2013-17 period. 
The end of that five-year run was strong: Full-year 2017 demand for air freight grew 9%— twice the pace of the expansion in world trade (4.3%). The start to 2018 has been similarly positive, with global FTKs up 7.7% through February, IATA figures show.
But the steady climb faces a quickly emerging threat: A trade war that could draw in some of the world’s largest national economies. The US and China—the world’s top two single-country economies—have traded salvos that, should both sides follow through, would place tariffs on hundreds of goods, ranging from raw materials to entire aircraft. Thus far, the direct threat to commercial aviation appears purposefully muted, with China, for example, setting very careful parameters that would place tariffs on only certain, smaller US-made commercial aircraft.
This apparent carving-out of aircraft production—China relies on Boeing for about half of its new orders, and large backlogs at both Boeing and Airbus make switching allegiances a costly proposition—leaves air freight as arguably the most threatened sector in commercial aviation.
“After decades of globalization and the breaking down of borders, there is a risk that policymakers continue down a more inward-looking path,” IATA wrote in its forecast, which was released in late March, just as the tariff threats were heating up. “Certainly, recent years have seen politicians embrace more national solutions; the recent imposition of tariffs on steel and aluminum imports by the US are a case in point. Once again, a pick-up in protectionism would weaken the underlying operating environment for air freight in the coming years.”

AsBAA Warns of China/U.S. Trade Spat Consequences
The Asian Business Aviation Association (AsBAA) expressed concern about potential consequences of a growing trade dispute in light of the recent announcements for planned new tariffs on U.S. and Chinese goods. “The newly proposed tariff announcements might affect a certain weight category of business jet aircraft being imported into China,” AsBAA chair Jenny Lau wrote in a memo to members. “This could influence buyers' decision making, having an effect on manufacturers and the wider business aviation industry, although it is too early to predict the magnitude of any potential impact.”
The Aerospace Industries Association has warned about potential increased costs U.S. aerospace manufacturers will face as a result of U.S. tariffs on steel and aluminum. The Chinese tariffs, meanwhile, could hit Gulfstream and Boeing Business Jet sales.
Lau noted that the tariffs could affect not only business jet manufacturers, but also the supply chain. “AsBAA does not comment on public policy; however, we are concerned about the consequences of a growing trade dispute in the medium term,” she said. “AsBAA’s priority is to continue to represent the needs of our members, advocating the positive economic impact business aviation brings while finding solutions that allow business and trade to continue as normal, despite these political issues.” Lau expects that topic to be a focus of discussion during ABACE later this month in Shanghai.