U.S., Mexico wrap first set of talks over trade deal shielding HVAC products from tariffs

The U.S. has officially kicked off discussions with Mexico over the future of the trade deal that has shielded the HVAC industry from the brunt of tariff impacts over the past year. 

The backdrop: In March 2025, President Trump issued a tariff exemption for certain products covered under the U.S.-Mexico-Canada Agreement (USMCA) — a trade pact that took effect during his first term in 2020 — including a range of HVAC and water heating products. 

• A clause in the agreement requires a formal review every six years, allowing the countries to decide whether to continue, renegotiate, or end it altogether. 

What’s happening: The U.S. and Mexico on May 29 concluded the first “bilateral round,” with two remaining discussions scheduled for June 16-17 and July 20. 

• “The United States continues to emphasize the importance of ensuring the Agreement benefits U.S. manufacturers, farmers, ranchers, workers, service suppliers, and businesses of all sizes,” the Office of the U.S. Trade Representative wrote in a statement. 

Why it matters: Mexico is the U.S. HVAC industry’s largest foreign supplier, representing roughly 40 percent of the industry’s manufacturing capacity.

What we’re watching: Trump has made dismissive comments about the USMCA, in January calling it “irrelevant.” It’s “not a secret” the president has considered nixing the agreement, U.S. Trade Rep. Jamieson Greer told Bloomberg in February. 

• Yes, but: Trump hasn’t publicly criticized the USMCA since then. 
• Meanwhile, it remains unclear whether HVAC-specific exemptions will be addressed in the upcoming discussions. The White House didn’t return a request for comment. 

Of note: Under a separate, non-USMCA set of tariffs, the president last week signed a proclamation adding “certain heating, ventilation, and air conditioning (HVAC) systems and components that are predominantly for residential use” to a category of products subject to a temporarily-reduced 15 percent tariff rate — down from 25 percent — beginning June 8.