The United States and Mexico have launched discussions over the future of a key provision in their trade agreement that has helped shield HVAC products from tariffs, potentially reshaping the HVAC trade landscape between the two nations.
In March 2025, President Trump issued a tariff exemption for certain heating, ventilation, and air conditioning (HVAC) and water heating products under the U.S.-Mexico-Canada Agreement (USMCA). This trade pact, first implemented in July 2020 during Trump’s initial term, includes a clause requiring a formal review every six years. These reviews give participating countries an opportunity to decide whether to continue, revise, or terminate sections of the agreement.
Mexico is a critical partner for the U.S. HVAC sector as the country serves as its largest foreign supplier, accounting for approximately 40% of the industry’s manufacturing capacity.
On May 29, representatives from the U.S. and Mexico concluded the first round of bilateral discussions, with two additional rounds scheduled for June 16-17 and July 20. The Office of the U.S. Trade Representative (USTR) emphasized the importance of this agreement in benefiting various sectors in the U.S., stating,
"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."
While there is significant interest in the outcomes of these talks, it remains unclear whether the HVAC-specific exemptions will be revisited during the discussions. The White House has not responded to requests for comment on possible changes to this provision.
President Trump has expressed skepticism about the relevance of the USMCA. In January, he referred to the agreement as "irrelevant", and according to U.S. Trade Representative Jamieson Greer, it is "not a secret" that Trump has considered abandoning the agreement altogether. However, the president has not publicly criticized the USMCA since his January comments.
Separately, President Trump recently signed a proclamation that adjusted tariffs on residential HVAC systems and components outside of the USMCA framework. These products, which fall under a different set of tariffs, will see a temporary reduction from 25% to 15%, effective yesterday, June 8.
As U.S. and Mexican officials navigate these negotiations, the HVAC industry and its stakeholders are closely watching for any decisions that could alter the existing tariff exemptions. The results could have far-reaching implications for one of the U.S.A.’s most important trade relationships and a critical supply chain for HVAC products. For now, those of us in HVAC will have to live in the uncertainty until June 16-17 and July 20, 2026.
