Trump to renegotiate Mexico-Canada trade deal, HVAC exemptions safe for now

President Trump will likely renegotiate next year the trade agreement between the U.S., Mexico, and Canada that currently exempts HVAC products from tariffs, Commerce Secretary Howard Lutnick said Sunday. 

Catch up quick: Mexico is America’s largest source of HVAC imports and represents 40 percent of the industry’s manufacturing capacity. 

• The U.S.-Mexico-Canada Agreement (USMCA), signed in July 2020, excludes a range of products from tariffs among the countries, which has helped the HVAC industry avoid the brunt of tariff impacts this year.

What’s happening: “I think the president is absolutely going to renegotiate [the] USMCA,” Lutnick said on CBS’s Face the Nation, “but that’s a year from today,” he added, referring to a clause in the agreement that allows it to be reassessed every six years. 

• It’s unlikely that renegotiations will be moved up sooner than that timeline, a White House official tells Homepros in an email. 

Meanwhile, a new set of tariffs on Mexico and Canada is set to take effect on August 1, though the USMCA exemption is expected to remain in place, the official noted. 

What to watch: It’s unclear what specific changes the president might seek regarding HVAC products, if any, during renegotiations. And while the USMCA exemption will likely stay put on August 1, the White House official added that no final paperwork has been drafted yet.