The War on Steel and Aluminum

“What You Need to Know”

The sky is not falling, I promise.

Although many fear negative ramifications from the new U.S. tariffs on steel and aluminum imports, there are a few things to consider before you write off 2018 as a loss.

The tariffs on imported metals took effect March 23rd, boasting a hefty 25% tariff on steel and a 10% tariff on aluminum. This does not mean that manufacturer’s prices on finished HVAC equipment will experience the same 10-25% increase. In fact, in most cases the impact to mechanical contractors, residential dealers, home owners, and building owners will be marginal in comparison. 

There will inevitably be some variance in market price at the beginning, but it is likely to balance out in the coming months. Then it will be back to business as usual. 

Now that we got that out of the way, let’s talk about the good!

Did you know that Canada is the top steel exporter to the United States? Did you know that Mexico is the 4th largest steel exporter to the United States? Do you know what countries are excluded from the new tariffs? 

That’s right, you guessed it, it’s Canada and Mexico. 

He giveth and he taketh away.

The current administration recently rolled out new tax revisions that took effect January 1st, which cut most Americans income taxes by an average of $1,200. The new tax law also increased deductions and even added some new ones, like the ability for a small business to immediately deduct the FULL purchase price of HVAC equipment purchased or financed. 

All of this will continue to create more opportunity and better cash flow in 2018. 

The market has continued to be on an upward trend, and with more money in consumers’ pockets, purchasing is expected to fall in line with this trend in 2018. With all things considered, the new tariffs will not have as much of a negative impact as it would appear. 

So don’t fret. 

Use 2018 as an opportunity to expand your business and reach new horizons.

Tyler Shockley
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