U.S.-Canada Trade War Escalates as 50% Tariffs Take Effect

Trade tensions between the U.S. and Canada have escalated sharply, with new 50 percent U.S. tariffs on nearly $20 billion in Canadian imports taking effect after weekend negotiations broke down. The tariffs cover hundreds of categories, including wine, cement, plywood, and furniture, and apply even to goods that otherwise qualify under North American trade rules. Canada has announced matching tariffs on U.S. goods starting after Labor Day. These new duties are separate from existing tariffs on steel, aluminum, and copper.

For homeowners planning HVAC or other equipment purchases, the practical concern is cost and availability. Industry groups say tariffs on steel and aluminum, materials used in compressors, coils, cabinets, and other HVAC parts, have already pushed up bid prices and lengthened wait times for equipment. There is one exception worth knowing: since June 2026, the tariff on certain residential HVAC equipment was lowered from 25 percent to 15 percent, and equipment made with at least 85 percent U.S. steel or aluminum can qualify for an even lower 10 percent rate. That carve-out is set to last through December 2027.

Beyond that, the outlook is uncertain. Economists had thought tariff-driven price increases were leveling off, but this new round, layered on top of already higher energy and transportation costs, could mean another price increase for HVAC equipment and related home projects. If you're planning a heating or cooling upgrade, it may be worth asking installers directly whether current quotes reflect these tariff changes.