U.S. lowers China tariffs, HVAC products still face higher rate

Following a weekend of marathon meetings, the Trump administration announced early Monday morning that it’s lowering the tariff rate on Chinese imports from 145 to 30 percent for 90 days. But certain product-specific tariffs impacting the HVAC industry remain in place. 

Why it matters: China supplied $6 billion worth of HVAC and water heating products to the U.S. last year, making it the second-largest exporter behind Mexico. 

What’s happening: The new 30 percent rate combines a 10 percent baseline tariff with an additional 20 percent aimed at curbing the flow of fentanyl into the U.S. Both countries will use the 90 days to hash out a larger trade deal.

• Yes, but: Nearly half of all HVAC and water heating imports from China, according to AHRI, including compressors, motors, and heat exchangers, still face a separate 25 percent tariff imposed in 2018. Combined with Monday’s 30 percent, these products carry a 55 percent tariff. 

The good news: While China faces higher rates, Mexico, which accounts for roughly 40 percent of the industry’s manufacturing capacity, remains exempt from tariffs. 

• Meanwhile, other major HVAC exporters to the U.S., including Japan, South Korea, and Thailand, saw their rates reduced to 10 percent under a separate 90-day pause announced in April.

What’s next: Both pauses — Monday’s and April’s, expiring in mid-August and mid-July, respectively — give the administration time to cut deals.