The Effect of Chinese Tariffs on the HVAC Industry

Posted by Victoria May on May 24, 2019, 1:18:00 PM
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Recently, our President, William Swanson, was a part of a roundtable conversation on ABC7 regarding the effect the Chinese tariffs would have on the HVAC industry. Watch or read to find out what the impact will be on the industry and the homeowner.

Will the Chinese Tariffs Impact the HVAC Industry?

 

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1) What Are Tariffs?

A tariff is a tax on imports or exports between sovereign states. It is a form of trade regulations designed to encourage or safeguard domestic industries or production and essentially level the field when it comes to trade.

 

2) Is Reducing Tariffs a Good Thing?

Yes. Whenever there is tariff conflict, at the end of the day, it hurts the consumer.

 

3) How Are Small Businesses (Specifically Tri County Air) Being Affected by Tariff Changes?

We order parts and components from manufacturers who build their equipment in the USA and all over the world. So far, we have not been affected by the tariff conflict with China. Most of the large manufacturers have stated that there will not be a price increase due to tariff conflict this year. This is because the manufacturers saw this coming and were able to diversify their manufacturing in time. Due to this diversification, the effects of the tariff changes are not being felt as acutely. 

 

4) Is the Fear Associated with Tariffs Just an Excuse to Increase Prices?

In some instances, yes. For example, the cost to manufacture washing machines has increased, so the cost to purchase washing machines has increased as well. At the same time, the cost to purchase a dryer has increased even though the cost to manufacture dryers has not increased like it has with washing machines. Why are they raising their prices? Simply because they can. All this strife is costing us money.

 

5) What Has Led to This Tariff Conflict with the USA and China?

The biggest complaint is that China has been stealing the technology produced in the USA. Tech. companies in America will spend billions of dollars creating something only to have China take it and create it for less. China is all about gaining market share, and since they don't have investors to respond to, pricing and profit is not as important to them. We need to make sure we are protecting this technology.

 

6) Is It Now More Important for Small Businesses to Source Items from Alternate Manufacturers?

If you are a small air conditioning company, you may have only one supplier. Therefore, you are dependent on the pricing of that one supplier. Fortunately, at Tri County Air we have multiple suppliers, so we use the competition between those manufacturers to keep them honest and to ensure fair pricing.

 

If you have any questions, we are here for you!

Give us a call: (941) 485-2222

Text us: (941) 242-7185

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Topics: Industry News, Video