FX Excursions

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New Tariffs May Depress Demand for Travel Between the United States, China

by Allie Menzione

Mar 27, 2018
eFlyer Lead

The Trump Administration’s recent decision to impose strict tariffs on many goods from China sparked some concern about future travel between the United States and China. Zhihang Chi, vice president and general manager for North America, Air China, is one of several officials voicing apprehension about the  coming effects.

President Trump announced last week he directed the U.S. trade representative to assess tariffs on up to $60 billion in Chinese goods, though officials said the figure would be closer to $50 billion. The changes are said to both punish Chinese companies for stealing American intellectual property and to protect American interests. China also announced its own tariff Friday on $3 billion worth of U.S. imports in response to the steel and aluminum tariffs announced earlier in March.

Airlines could be one of many industries to experience a negative impact from the tariffs, as well as Boeing, as it sells a significant number of jets to Chinese airlines.

In a report from an analyst with Buckingham Research Group, Daniel Mckenzie claimed tariffs have a negative impact on travel demand and United Airlines could be most at risk among U.S. airlines due to its China capacity. United Airlines currently has flights to Chengdu, Beijing and Shanghai.

Korean Air Lines is a carrier that may see effects from the changes due to a strong American traveler presence on its flights to more than 20 destinations in China.

The tariffs will not take effect immediately; the U.S. trade representative will publish a list of targeted goods within two weeks and allow for a 30-day public comment period.

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