Hardware, Plumbing & HVAC Distributors NAICS 4237

May 23, 2025 - Tariffs to Increase HVAC Equipment Prices

• The Trump administration’s tariff policies will likely increase prices for HVAC equipment, according to Facilities Dive. On April 9, the Trump administration paused its reciprocal tariff agenda for 90 days for most countries but left in place a baseline 10% import duty on all countries except China, which faced total tariffs of 145%. Canada and Mexico are not subject to the new 10% baseline tariffs, and goods trading under the US-Mexico-Canada Agreement will remain duty-free. The president of government affairs of the Heating, Air Conditioning, and Refrigeration Distributors International said in a statement that the tariffs will affect eight of the top 10 exporters of HVACR equipment to the US, and that any increased costs would likely be passed on to consumers. On May 12, 2025, the US and China declared a 90-day reduction in the tariffs each country imposed on the other amid further negotiations. The US tariff on imports from China was reduced from 145% to 30%, while China dropped its duty on US imports from 125% to 10%.
• In recent calls with analysts discussing first-quarter results, executives at Lowe’s and Home Depot reiterated their firms’ full-year guidance for 2025, according to Retail Dive. Home Depot posted a 9.4% year-over-year rise in Q1 revenue and stuck to its full-year guidance of 2.8% sales growth for 2025. Lowe’s notched a Q1 revenue decline of 2% but reiterated its 2025 guidance of sales between $83.5 billion and $84.5 billion. Home Depot’s CEO said the company did not intend to raise prices due to tariffs. More than half of Home Depot’s purchasing is sourced from the US, and by mid-2026, the firm believes that no country outside the US will account for more than 10% of its purchases. Lowe’s CEO didn’t explicitly rule out price hikes due to tariffs, but he said the firm will remain competitive on price. About 60% of Lowe’s purchases are sourced in the US, and about 20% are from China.

• The number of building permits issued for single-family, privately-owned housing units, a demand driver for interior design services, decreased 5.1% in April 2025 compared to March and fell 6.2% year-over-year. Single-family housing starts dropped by 1.6% month-over-month and were down 12% compared to April 2024. Single-family housing completions declined 5.9% in April from the previous month and decreased 12.3% year-over-year. Housing starts in April were pressured by tariff-related economic uncertainty, high mortgage rates, and rising costs for building materials, according to the National Association of Home Builders (NAHB).
• Home remodeling spending is expected to see slight gains through 2026 after two years of weakening expenditures, according to the Leading Indicator of Remodeling Activity (LIRA) report released in April by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 0.8% to $505 billion in the second quarter of 2025 compared to Q2 2024. In the third quarter of 2025, remodeling spending will rise to $506 billion, up 1.4% from Q3 2024. Spending will then increase to $512 billion in Q4 2025, up 1.8% from Q4 2024. In the first quarter of 2026, year-over-year spending is forecast to rise 2.8% to a record $526 billion. Joint Center expects improvements to be supported by increasing home values, a steady labor market, and gradually improving existing home sales. However, uncertainty stemming from trade strife and waning consumer confidence could put downward pressure on remodeling demand.