90-day tariff pause brings some relief to the HVAC industry

Just days after a range of new tariffs took effect globally, President Trump on Wednesday announced a 90-day pause for over 75 countries, lowering their tariff rates to a flat 10 percent during the period. 

Why it matters: Nine of the top 10 exporters of HVAC and water heating products to the U.S. are either exempt or included in the pause, giving the industry a temporary breather. 

What’s happening: The announcement comes as each of these countries has reached out to the administration to negotiate a deal, the president said. 

• The latest: Despite the noise, an exemption for certain imports from Canada and Mexico, which includes HVAC products, remains in place. 
• Other top exporters, including Japan, South Korea, and Thailand, which shipped nearly $3 billion of HVAC industry products to the U.S. last year, will see their rates drop from upwards of 24 percent to 10 percent for the next 90 days. 

Yes, but: In the same announcement, the president upped the tariff rate on China, bringing its total to 145 percent. China, the third-largest exporter, shipped $6 billion of HVAC and water heating products to the U.S. last year. 

• “At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,” Trump wrote on Truth Social. 
• A 25 percent tariff on steel and aluminum imports from all countries will also remain in place. 

Of note: While China’s new rate is substantial, around 40 percent of the industry’s total manufacturing capacity is in Mexico, according to Lennox CEO Alok Maskara. 

• Manufacturers had already prepared for this scenario, with Lennox, for instance, reducing its reliance on China by shifting its mini-split operations to South Korea. 

What we’re watching: The next 90 days, and any announcements regarding top exporters, including Canada and Mexico, Japan, South Korea, and China.