An Eye on 2025 Tariffs Shaping the HVAC Industry

The HVAC industry has faced a variety of economic pressures over the years. One that is currently in play are the tariffs established by the Trump administration that went into effect in mid-April. These tariffs lead to questions about how they will affect supply chains and balance sheets of HVAC manufacturers, contractors, and consumers alike.

This blog takes a closer look at these major tariffs—particularly those targeting steel, aluminum, and Chinese imports—and what they mean for the HVAC industry today and in the future.

How Tariffs Affect HVAC Manufacturers

For HVAC manufacturers, the most immediate impact of tariffs is the increased cost of raw materials and components.

1. Steel and Aluminum Costs

Steel and aluminum are fundamental to the construction of HVAC systems—everything from ductwork and furnaces to outdoor condenser units depends on these metals. According to an article from the ACHR News, the new tariffs include a 34% tariff on goods from China, 20% on goods from the European Union, 24% or more for some items on Japanese products, 32% on products from Taiwan, and 46% on Vietnamese imports.

This means that HVAC manufacturers that assemble HVAC units in the U.S. will pay more for many foreign components.

“With President Trump’s announcement of tariffs on eight of the top 10 exporters of HVACR and water-heating equipment to the United States going as high as 46%, we expect to see price increases passed on to consumers,” said Alex Ayers, vice president of government affairs at Heating, Air conditioning & Refrigeration Distributors International (HARDI).

With tariffs adding such imported material costs, manufacturers must choose to either absorb the extra cost and reduce their margins or pass those costs along the supply chain.

Homepros, a digital media and news company covering the HVAC industry, reports that China exported $6 billion of HVAC and water heating products to the U.S. last year. Its article says that China already had a 20% tariff imposed earlier in 2025, and the country is set to receive another 34% tariff April 9, bringing its total tax to 54%. Additionally, the article states that a 25% tariff on steel and aluminum imports from all countries will remain in place.

Visit the Heating Air-conditioning Refrigeration Distributors International (HARDI) online tariff tracker to stay up to date on the percentage of each country’s tariff and when they take effect.

2. Component Shortages and Supply Chain Disruptions

Many HVAC components, particularly electronic controls, sensors, and specialized motors are sourced from China. The Section 301 tariffs have made these imports more expensive and less predictable. These are specific tariffs applied to imports coming from nations that the U.S. feels are violating fair trade policies. In some cases, manufacturers have sought alternative suppliers in countries like Vietnam or Mexico, but reconfiguring a global supply chain isn’t quick—or cheap.

Delays in obtaining key components can lead to longer production cycles and decreased inventory levels, further complicating the already seasonal nature of HVAC demand.

How Tariffs Affect HVAC Contractors and Distributors

Contractors and distributors form the critical link between manufacturers and homeowners or businesses. As prices of equipment and parts increase, HVAC companies are forced to manage tighter profit margins while keeping customers informed and satisfied.

1. Rising Equipment Prices

Since tariffs contribute to higher costs for raw materials and imported components, HVAC units themselves have seen noticeable price increases in recent years. Some contractors report double-digit cost hikes on common equipment like residential AC systems and heat pumps.

This creates challenges not only for bidding on new projects but also for maintaining competitiveness in a price-sensitive market.

2. Planning and Inventory Risks

Distributors and contractors who rely on just-in-time inventory have faced increased risk due to unpredictable tariff-related cost changes and longer lead times. Stockpiling key parts is becoming more common, but it requires capital and storage that many smaller HVAC contractors might not be able to afford.

How Tariffs Affect Consumer Repairs and Replacements

Ultimately, the cost burden tends to trickle down to homeowners and business owners. Whether you’re installing a new system or scheduling a routine repair, you are now facing:

• Higher installation costs due to more expensive units and labor.
• More costly repairs, as replacement parts—especially those sourced from overseas—carry tariff-induced premiums.
• Longer wait times for new systems or critical components during peak seasons.

This can be especially frustrating during extreme weather months, when HVAC reliability is more than just a comfort.

What the HVAC Industry Can Do

Despite the challenges, the HVAC industry is prepared to adapt. David Rampey, president and owner of Air Assurance in Tulsa, Oklahoma, says the industry has faced a constant barrage of price hikes since Covid, whether it has come from supply chain challenges regulations changes from the Environmental Protection Agency or the Department of Energy.

Many HVAC companies are working with their financing partners to negotiate and obtain the best rates for customers along with partnering with institutions that also charge the HVAC company the best rates, hence eliminating as much of the financing costs for us all. Due to Air Assurance’s size and volume, the company can leverage its buying power and purchase truckloads of equipment at a time, he says. This allows Air Assurance to “stock up” before price increases hit their doorstep. Some other strategies that HVAC companies are turning to include:

• Diversifying the supply chain: Manufacturers are investing in relationships with suppliers outside of China to reduce exposure to tariffs and geopolitical risk.
• Increasing domestic production: A few companies have expanded U.S. manufacturing capacity, in part to avoid import tariffs and improve responsiveness.
• Leveraging technology: From smart inventory management to remote diagnostics, HVAC professionals are using tech to work smarter and manage costs.

Government incentives for energy-efficient upgrades and green technologies also have helped to offset some of the added costs by encouraging system replacements and updates.

It will take time to fully realize the effects of the tariffs introduced during the Trump administration. While they are intended to support domestic manufacturing and correct trade imbalances, they can contribute to higher costs and ongoing supply chain challenges for contractors, manufacturers, and consumers. As the industry looks forward, adaptability remains key. Companies like Air Specialist will have to navigate rising costs, source more strategically, and communicate transparently with customers are better positioned to weather the storm—and maybe even come out stronger on the other side. Contact Air Specialist with specific questions or for all of your HVAC needs.