A little-known change to U.S. tariff rules is beginning to affect the heating and cooling industry. Contractors and industry groups say the adjustment could increase equipment costs during the busiest part of the cooling season.
The change centers onSection 232 tariffs covering steel and aluminum imports. According to the Air Conditioning Contractors of America (ACCA), a revision introduced in early April altered how U.S.-origin metals are treated when they are incorporated into products manufactured abroad and then imported into the United States.
For many homeowners, air conditioning costs tend to remain out of sight until a system requires repair or replacement. Industry representatives now warn that a trade policy change may be making its way through the HVACR supply chain, potentially affecting equipment prices paid by contractors and, ultimately, customers.
A Key Exemption for U.S.-Origin Metals Has Been Removed
Section 232 is a trade law that allows the federal government to impose tariffs on imports deemed relevant to national security concerns. Steel and aluminum products have been subject to these tariffs for years.
The significant change, according to ACCA, involves the removal of an exemption that previously applied to U.S.-origin steel and aluminum. Under the earlier framework, metal produced in the United States did not count toward the tariff calculation when it returned to the country as part of a finished imported product.
ACCA stated in an April 18 update that the exemption was originally intended to encourage the use of domestically produced metals. The organization said the removal of that provision is particularly important for HVACR equipment manufactured in Mexico. According to ACCA, Mexico is the largest single exporter of HVACR products to the United States. As a result, changes affecting imports from Mexico have implications across a large portion of the industry’s supply chain.
In an April blog post cited by the organization, ACCA warned that the updated rules could “significantly drive up equipment costs for contractors and their customers,” creating additional challenges as contractors enter the peak season for cooling-related work.
Industry Groups Say Equipment Costs Could Rise Across the Supply Chain
Industry organizations have pointed to a substantial change in the effective tariff burden on certain imported HVACR products.
According to ACCA, citing data and analysis from HARDI, the association representing HVAC distributors, import figures from late 2025 showed that HVACR products arriving from Mexico faced an effective tariff rate of roughly 8%. That lower rate reflected the fact that approximately84% of the metal content in those products originated in the United States and therefore qualified for the exemption that existed at the time.
Under the revised rules, ACCA explained, those products no longer receive that preferential treatment. Instead, they are subject to a25% tariff applied to the entire value of the product rather than only the non-exempt metal content. HARDI told Contracting Business that the effective tariff rate on Mexican-made HVACR equipment could therefore move closer to the full 25% level.
Kate Wessels, ACCA’s vice president of communications, noted that tariffs are only one factor affecting equipment prices. Still, the organization said it expects higher costs to move through the supply chain, first affecting distributors and contractors before potentially reaching homeowners and businesses purchasing equipment or services. As the cooling season begins, the industry continues to assess the impact of the revised Section 232 rules on HVACR equipment imported into the United States.
