Trump Reduces Tariffs on Some HVAC Equipment to 15%
The Trump administration announced a reduction in Section 232 tariffs on certain residential HVAC equipment on June 1, 2026, dropping the rate from 25% to 15%. The change takes effect at 12:01 a.m. Eastern Time on June 8, 2026 and is currently set to expire December 31, 2027.
The earlier round of tariff hikes already drove HVAC equipment costs up across the board (we broke that down in how tariffs are driving up AC costs in South Florida). Contractors and distributors have been absorbing those increases for months, so a 10-point cut on residential equipment is the first real pricing relief of the year. But the reduction is narrow, temporary, and depends entirely on how each product is classified at customs.
What’s Actually Covered at 15%
The reduction applies to a specific set of HTSUS codes added to Annex III of the proclamation. The HVAC items now eligible for the 15% rate include:
- Residential air-conditioning machines
- Parts of air-conditioning machines
- Heat pump parts used in air-conditioning machines
- Evaporator coils, specifically aluminum-derivative coils
If a product’s tariff code appears in Annex III, it moves from 25% to 15% on June 8. If it does not, nothing changes.
HARDI, the wholesale HVAC distributor trade group, estimates the change will save U.S. consumers roughly $2.3 billion. Alex Ayers, HARDI’s VP of Government Affairs, framed it as the administration “recognizing that access to affordable heating and cooling is a matter of safety.”
What’s Still at 25% or Higher
Plenty of HVAC-adjacent equipment did not make Annex III:
- Most commercial HVAC equipment (rooftop units, large package systems, commercial chillers)
- Components not classified specifically as residential air-conditioning or heat pump parts
- Raw steel and aluminum imports (still at 25%)
- Copper, which sits at a higher 50% rate for certain product categories
- Equipment imported from countries without preferential trade treatment
| Category | Now 15% | Still 25% (or 50% on some copper) |
|---|---|---|
| AC units | Residential air-conditioning machines | Commercial rooftop units, large package systems, chillers |
| AC parts & coils | Parts of residential AC machines; aluminum-derivative evaporator coils | Parts not classified as residential AC or heat pump components |
| Heat pumps | Heat pump parts used in residential AC machines | Industrial and commercial heat pump assemblies |
| Raw metals | None of the metal raw materials moved to 15% | Steel and aluminum imports at 25%; copper at 50% for some product categories |
| Country of origin | EU, UK, Japan, Korea, Switzerland, Taiwan capped at 15%; USMCA partners pay only on non-U.S. content with a 15% minimum | Equipment from countries with no preferential trade treatment |
Two units that look identical on a jobsite may not be treated the same at customs. Classification is the deciding factor, and the bar for “residential” is set by the HTSUS subheading, not by how a contractor uses the equipment.
Why Country of Origin Matters
Section 232 tariffs apply differently depending on where the equipment is made. Per the June 2 C.H. Robinson customs advisory:
- Equipment from the EU, UK, Japan, Korea, Switzerland, Taiwan, and a handful of other treaty partners is capped at a 15% effective duty.
- USMCA partners (Canada and Mexico) pay duties only on the non-U.S. content of the product, with a 15% minimum effective rate.
- Everywhere else falls under the standard Section 232 rates.
The proclamation also relaxes the “U.S. metals” definition. A product previously had to be made from 95% U.S. metal to count as “entirely U.S. metals” and avoid the tariff. That threshold drops to 85% on June 8, expanding the pool of equipment that qualifies as domestic.
What About Chinese-Made Equipment?
Section 232 is only one of several tariffs stacking on goods from China. The new 15% rate on Annex III items applies to Chinese-origin equipment too, but the full picture looks different because of two other tariff layers that are still in force:
| Tariff | Rate on Chinese HVAC | Notes |
|---|---|---|
| Section 232 (this proclamation) | 15% if in Annex III; 25% if not | The new Annex III cut applies to China-origin goods, but China is not on the preferential country cap list |
| Section 301 (China-specific) | 25% on Lists 1–3 (most HVAC); 7.5% on List 4A | Separate authority, untouched by this proclamation. Stacks on top of Section 232 |
| IEEPA reciprocal tariff | 10% baseline | The Supreme Court struck down the higher reciprocal rates in February 2026 (Learning Resources, Inc. v. Trump), but the 10% baseline remains |
A Chinese-made residential AC unit that qualifies for the new 15% Section 232 rate effectively lands around 50% total tariff (15 + 25 + 10). One that does not qualify lands around 60%. The June 8 cut shaves 10 points off the Section 232 portion either way, but that is the only piece of the stack that changed.
The practical effect for South Florida: a lot of HVAC components, including compressors, motors, electronic control boards, and fan blades, are Chinese-sourced even when the finished unit is assembled in Mexico, the U.S., or a third country. Those parts will stay expensive after June 8. The biggest pricing relief will land on equipment finished in countries on the preferential list (EU, Japan, Korea, and USMCA partners), where the Section 232 cap takes effect cleanly and there is no Section 301 overlay.
What 15% vs. 25% Means in Dollars
A 25% tariff means the importer pays a duty equal to one quarter of the product’s customs value. A 15% tariff lowers that by 10 percentage points.
On a covered HVAC unit with a customs value of $10,000, a 25% tariff adds $2,500 in duty. A 15% tariff adds $1,500. That is $1,000 less per unit before freight, handling, and markup. Whether contractors or homeowners see any of that depends on how distributors handle their existing inventory and margin.
Will Contractors and Homeowners See Lower Prices?
Not automatically, and not all of it. Tariffs are one input into total equipment cost. Suppliers may still be moving inventory purchased at the higher rate, and some will hold prices steady to recover margin compressed during the earlier hikes.
The relief will likely show up in:
- New wholesale quotes dated after June 8
- Replenishment orders, not existing stock
- Equipment specifically classified as residential under Annex III
Equipment imported before June 8 and already sitting in a distributor’s warehouse paid the 25% rate at customs. That cost is already baked in.
What to Ask Your Distributor
- Is the equipment classified under an Annex III HTSUS code? (If yes, it should move to 15%.)
- Is the unit residential or commercial under the tariff schedule?
- Was it imported before or after June 8, 2026?
- What is the country of origin, and does it qualify for preferential treatment?
- What percentage of the metal content is U.S.-sourced? (85% or more now qualifies as “entirely U.S. metals.”)
A reputable distributor should be able to answer all five without flinching.
The Bottom Line
This is targeted, temporary relief on a defined slice of residential HVAC equipment. The reduction runs through December 31, 2027 unless extended. Commercial equipment, raw metals, and anything outside Annex III are not affected. As national trade coverage has noted, the dollar savings are real where they apply, but the pass-through to contractors and homeowners will be gradual and uneven across distributors.
If you are planning a new AC system this summer in South Florida, the practical takeaway is to ask your contractor when the equipment they are quoting was imported and how it is classified. The window for these savings is real but narrow, and it will not be the same across every brand or every distributor.
Frequently Asked Questions
What HVAC equipment is covered by the new 15% tariff rate?
The reduction applies to HTSUS codes added to Annex III of the proclamation. The HVAC items eligible for the 15% rate include residential air-conditioning machines, parts of air-conditioning machines, heat pump parts used in air-conditioning machines, and aluminum-derivative evaporator coils. If a product’s tariff code is on the Annex III list, it moves from 25% to 15% on June 8, 2026. If it is not on the list, nothing changes.
What HVAC equipment is NOT covered by the tariff cut?
Most commercial HVAC equipment such as rooftop units, large package systems, and commercial chillers stays at 25%. Components not classified specifically as residential AC or heat pump parts are not covered. Raw steel and aluminum imports remain at 25%, copper sits at a higher 50% for some product categories, and equipment from countries without preferential trade treatment is unchanged.
When does the new HVAC tariff rate take effect, and when does it expire?
The reduction takes effect at 12:01 a.m. Eastern Time on June 8, 2026, and is currently set to expire December 31, 2027. The relief is temporary unless extended.
Does the country where the HVAC equipment is made affect the tariff rate?
Yes. Equipment from the EU, UK, Japan, Korea, Switzerland, Taiwan, and several other treaty partners is capped at a 15% effective duty. USMCA partners (Canada and Mexico) pay duties only on the non-U.S. content of the product with a 15% minimum effective rate. Equipment from other countries falls under the standard Section 232 rates.
What is the new 85% U.S. metals threshold?
Before June 8, 2026, a product had to be made from at least 95% U.S. metal to qualify as ‘entirely U.S. metals’ and avoid the Section 232 tariff. That threshold has been lowered to 85%, which expands the pool of HVAC equipment that qualifies as domestic and is exempt from the tariff.
What does 15% vs. 25% mean in dollars on an HVAC unit?
A 25% tariff means the importer pays a duty equal to one quarter of the product’s customs value. A 15% tariff lowers that by 10 percentage points. On a covered HVAC unit with a customs value of $10,000, a 25% tariff adds $2,500 in duty. A 15% tariff adds $1,500. That is $1,000 less per unit before freight, handling, and markup.
Will contractors and homeowners see lower HVAC prices after June 8, 2026?
Not automatically. Tariffs are one input into total equipment cost. Suppliers may still be moving inventory purchased at the higher rate, and some will hold prices steady to recover margin lost during the earlier hikes. Equipment imported before June 8 already paid the 25% rate at customs and that cost is baked in. Expect the relief to show up first in new wholesale quotes, replenishment orders, and equipment specifically classified as residential under Annex III.
What should contractors ask their HVAC distributors after June 8?
Ask whether the equipment is classified under an Annex III HTSUS code, whether it is residential or commercial under the tariff schedule, whether it was imported before or after June 8, what the country of origin is and whether it qualifies for preferential treatment, and what percentage of the metal content is U.S.-sourced (85% or more now qualifies as entirely U.S. metals).
How much will the tariff cut save consumers overall?
HARDI, the wholesale HVAC distributor trade group, estimates the change will save U.S. consumers roughly $2.3 billion. Alex Ayers, HARDI’s VP of Government Affairs, said the administration is recognizing that access to affordable heating and cooling is a matter of safety.
Are Chinese-made HVAC parts still subject to high tariffs after June 8, 2026?
Yes, effectively. Section 232 is only one of several tariffs stacking on Chinese-origin goods. A Chinese-made HVAC unit eligible for the new 15% Section 232 rate still faces a 25% Section 301 tariff (on Lists 1-3, which cover most HVAC) and a 10% IEEPA reciprocal baseline, for an effective rate around 50%. A Chinese unit not on Annex III lands around 60%. The Supreme Court struck down higher IEEPA reciprocal rates in February 2026, but the 10% baseline and the Section 301 tariffs remain in force. Components like compressors, motors, control boards, and fan blades are frequently Chinese-sourced even in units finished in Mexico or the U.S., so those parts will stay expensive after June 8.