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The Independent
15-05-2025
- Business
- The Independent
Tariffs could hike up your air conditioning bill for your home and car this summer
Americans may find it costs them more to keep their homes cool this summer, and part of the blame for those rising costs could fall on President Donald Trump's economic policies. HVAC — Heating, Ventilation and Air Conditioning — professionals are warning that Trump's trade war, a coolant shortage, and forecasts calling for increasingly hotter days are likely to raise the overall cost Americans spending on their air conditioning this year, according to NBC News. According to HVAC professionals who spoke to the broadcaster, many have been eating the cost of doing business — labor, raw materials, and keeping up with regulations — as it's risen since the end of the Covid-19 pandemic. Like any other industry, HVAC professionals rely on supply chains to get the things they need to do their jobs, and with so many supply lines under tariff thanks to Trump's trade war, the cost of doing business is likely going to be put onto the consumer. Scott Shelton, the owner of Charlotte Comfort Systems, told NBC News he believed that his expenses had risen by 80 percent since the pandemic. Another HVAC professional, Aydin Mehr, said a part that typically costs $1,000 will cost $1,300 or $1,400 come September. He said that many HVAC shops were stockpiling their parts to try to keep their prices low, but noted that even by mid-May his trove is quickly depleting. It's no secret that the planet is warming up thanks to human-driven climate change through the burning of fossil fuels. Hotter days means more demand for air conditioning, which in turn is demand for electricity. The National Energy Assistance Directors Association said on Thursday that U.S. residential electricity costs are expected to average around $784 this year, pushing the average to the highest its been in 12 years. Costs are likely to go up for those who need an air conditioner fixed or installed, and costs are likely to go up for the electricity needed to run a unit, but what about costs for those are in the market an air conditioner? Prices are likely to go up. Last year, the U.S. imported more than $15 billion worth of air conditioners — approximately five times as much as it exported, according to the Observatory of Economic Complexity. Approximately half of the U.S.'s spending on air conditioning went to Mexico, and just under 20 percent went to China. According to experts, less than half of the air conditioner components the U.S. imports from Mexico are covered under the U.S.-Mexico-Canada Trade Agreement. Products covered by the agreements are shielded from Trump's tariffs, meaning HVAC professionals will still take on a noticeable financial burden this year. On Monday, the U.S. and China agreed to pause most of their tariffs for 90 days, but many suppliers buy their products on 90-day schedules, and some had stopped their orders — hoping to avoid Trump's tariffs — well before the U.S. and China reached a deal. It's going to take some time before product finds its way back stateside. 'In the best-case scenario, we're going to have a Covid-style type of thing where they're going to be waiting months just to get their stuff," Mehr told NBC News. On top of rising electricity costs and the trade war, HVAC workers are also dealing with an industry-wide shortage of R-454B, a more eco-friendly coolant that became required back in January. Trump signed a bipartisan measure into law in 2020 that led to the adoption of the regulation this year. Mehr told NBC News that he was expecting a large manufacturer to ship out the pumps using the coolant in mid-April, but "it still hasn't shipped because they didn't import the parts from China to finish them." Appliance maker Honeywell announced a 42 percent surcharge on the coolant, citing the "cumulative effect of increased costs and raw materials" made worse by an increase in demand. Cooling isn't just a luxury anymore; in some parts of the U.S. having an efficient way to stay cool indoors is a necessity. Families without an efficient means of cooling their living space run the risk of heat stroke and other heat-related health problems.
NBC News
15-05-2025
- Business
- NBC News
Tariffs are threatening your air conditioning bill this summer
Many consumers will pay more for air conditioning this summer as President Donald Trump's trade war collides with existing price pressures, a coolant shortage and scorching forecasts that are set to drive up utility bills. 'It is a sad time to need a new HVAC system,' said Scott Shelton, owner of Charlotte Comfort Systems in North Carolina. Heating, ventilation and air conditioning contractors say they've been weathering higher costs since the post-Covid recovery, for everything from labor and raw materials to a newly mandated refrigerant. With supply chains stretching deep into countries facing new tariffs, HVAC firms say it's impossible to avoid passing at least some of the higher costs on to customers. Shelton estimates his expenses have already risen by 80% since the pandemic. It is a sad time to need a new HVAC system. Scott Shelton, owner of Charlotte Comfort Systems, Charlotte, N.C. 'It'll affect lower and middle classes more than I've seen in my 38 years' experience in this industry,' he said of ongoing and expected cost increases. The prices U.S. manufacturers charge for HVAC and refrigeration equipment remain near the record highs they hit last summer, before Trump won re-election, and some contractors expect his levies to drive them higher. Take a component that cost $1,000 in March, said Aydin Mehr, who manages Denver-based UniColorado Heating and Cooling: 'Currently it's going to cost $1,100,' he said. 'In September, that same thing will cost $1,300 to 1,400.' Adding to the expected squeeze are steeper utility bills for many households. U.S. residential electricity costs are forecast to average $784 this summer, up 6.2% since last season and the highest level in 12 years, the National Energy Assistance Directors Association (NEADA) said Thursday. An early heat wave is already baking the Southwest and Texas this week, with Oklahoma City, San Antonio, Austin, Houston and Dallas breaking May records. Mehr voiced concerns about this summer. 'We're stockpiling like crazy to keep our prices low as long as possible,' he said, but his inventory is 'already diminishing rapidly.' Some top air-conditioner makers are responding to the Trump administration's reshoring push, with Carrier on Tuesday announcing a $1 billion five-year investment to expand domestic production. Analysts say the HVAC sector is relatively well-positioned to handle tariffs, including on steel and aluminum. But the industry still relies heavily on overseas suppliers, and contractors say many American importers are already curbing shipments, unsure which tariffs will stick. The United States imported more than $15 billion worth of air conditioners last year, about five times as much as it exported, according to the Observatory of Economic Complexity. Mexico and China — which currently face double-digit blanket tariffs — accounted for the largest shares of U.S. spending on AC imports, at 50% for Mexico and 19% for China. Analysts estimate less than half of Mexican-made HVAC equipment complies with the U.S.-Mexico-Canada Trade Agreement, the deal Trump brokered in his first term that spares some Mexican and Canadian goods from the 25% tariffs he imposed on them in his second. Many suppliers, which typically purchase on 90-day schedules, had already halted ordering by the time the U.S. and China agreed Monday to pause most of their tariffs for 90 days, Mehr said. 'In the best-case scenario, we're going to have a Covid-style type of thing where they're going to be waiting months just to get their stuff,' he predicted. A key factor is the industrywide shortage of R-454B, the more eco-friendly coolant that regulators began requiring in January under a bipartisan measure Trump signed in 2020. Mehr was expecting a major manufacturer to ship new heat pumps that use R-454B in mid-April, 'but it still hasn't shipped because they didn't import the parts from China to finish them.' We're stockpiling like crazy to keep our prices low as long as possible. Aydin Mehr, general manger of UniColorado Heating and Cooling, Denver He foresees the worst of the refrigerant shortage to last until mid-June or early July, easing right around when supplies of budget to midgrade AC units may start to dwindle. These fears may not pan out nationwide, or at all, but the coolant crunch is already driving up costs and delaying installations as manufacturers hike prices. Appliance giant Honeywell last month announced a 42% surcharge on R-454B, citing 'the cumulative effect of increased costs and raw materials' amid strong demand. Some HVAC contractors even accuse manufacturers of using supply-chain disruptions to price-gouge. Makers of cooling systems announced tariff-related price hikes 'before it even became real,' said Barton James, president and CEO of the Air Conditioning Contractors of America. 'The whole industry continues to test the waters on what's the breaking point for the consumer. And right now, we've not found it.' The Air-Conditioning, Heating and Refrigeration Institute called that allegation 'offensive.' The manufacturing trade group's members have their own concerns about the uncertainty posed by 'on again/off again tariffs,' spokesperson Francis Dietz said in a statement. 'Far from using tariffs as a cover to raise prices, manufacturers are going out of their way to minimize the economic impacts' and keep products affordable. Home Depot acknowledged a 'fluid environment' but declined to comment on specific product categories, and Lowe's didn't respond to a request for comment. Both home improvement giants report earnings next week. A White House spokesperson didn't respond to a request for comment. The crunch comes as meteorologists anticipate above-average temperatures in much of the U.S. this summer, after 2024 became the hottest summer on record. The National Weather Service forecasts excessive heat to generate hotspots from Maryland to Maine and Oregon to Texas. Parts of Utah, Nevada, Colorado and New Mexico are most likely to see hotter-than-average days over the next three months. With extreme heat exacerbated by climate change becoming more frequent, researchers say U.S. heat-related deaths have more than doubled in recent decades. This year there could be less federal aid to help households keep their homes at safe temperatures. Shortly after gutting the entire staff of the Low Income Home Energy Assistance Program, Trump proposed a budget that would slash the initiative's $4 billion in funding to zero. LIHEAP was established in 1981 to help struggling families cover home heating and, later, cooling costs including AC installations. But it has been strained by what advocates describe as chronic funding shortfalls coupled with surging demand for summertime relief. NEADA, which represents state officials who disburse LIHEAP aid, estimates that households facing utility arrears now owe a cumulative $21 billion, the most in four years. 'Without access to affordable cooling, many will be at risk of heat stroke and other health impacts associated with rising temperatures,' NEADA Executive Director Mark Wolfe said in a statement.
Business Recorder
04-05-2025
- Business
- Business Recorder
Oil prices set for biggest weekly losses
NEW YORK: Oil prices fell 1% on Friday and were set for their biggest weekly losses since the end of March, as traders turned cautious ahead of an OPEC+ meeting to decide the group's output policy for June. Brent crude futures were down 65 cents, or 1.1%, to $61.48 a barrel at 11:57 a.m. ET (1557 GMT), while US West Texas Intermediate crude futures fell 79 cents, or 1.3%, to $58.45 a barrel. For the week, Brent was on track to fall about 8% and WTI about 7%. The OPEC+ meeting was moved up to Saturday from the original plan of Monday, three sources told Reuters on Friday, although it was not immediately clear why the meeting was rescheduled. Members of the group, which includes the Organization of the Petroleum Exporting Countries and its allies, are deliberating whether to make another accelerated oil output increase in June or stick with a smaller hike, two of the sources said. Either way, oil traders braced for more supply from the group, at a time when fears of an economic slowdown caused by a trade war between the US and China have prompted market experts to lower demand growth expectations for this year. 'This market is all about OPEC now with even the tariff war taking a back seat,' United ICAP energy specialist Scott Shelton said. Reuters reported this week that officials from Saudi Arabia, the de facto leader of OPEC+, have briefed allies and industry experts that they are unwilling to prop up oil markets with further supply cuts. OPEC+ is currently cutting output by over 5 million barrels per day. Traders were also cautious given the possibility of a de-escalation of the trade dispute between China and the United States, after Beijing on Friday said it was evaluating a proposal from Washington to hold talks to address US President Donald Trump's tariffs. 'There is some optimism when it comes to US-China relations but the signs are only very tentative,' Harry Tchilinguirian, group head of research at Onyx Capital Group, said. 'It's still very fluid, a one step forward, two steps back situation when it comes to tariffs.' Friday's oil price decline was kept in check by rising equity markets, UBS analyst Giovanni Staunovo said, as Wall Street climbed after US jobs data showed payrolls increased more than expected last month. A threat by Trump on Thursday to impose secondary sanctions on buyers of Iranian oil also helped ease some of the pressure on oil prices, as it could tighten global supply. The threat, which came after US talks with Iran over its nuclear programme were postponed, could also complicate trade talks with China, which is the world's largest importer of Iran's crude.
The Star
03-05-2025
- Business
- The Star
Oil posts biggest weekly loss in a month ahead of OPEC+ meeting
JAKARTA/SINGAPORE (Reuters): Oil prices fell over 1% lower on Friday evening (May 2) and recorded for their biggest weekly losses since the end of March, as traders turned cautious ahead of an OPEC+ meeting to decide the group's output policy for June. USWest Texas Intermediate crude futures settled 95 cents, or 1.6%, to settle at US$58.29 a barrel. Brent crude futures closed down 84 cents, or 1.4%, at US$61.29 a barrel. For the week, Brent fell over 8% and WTI lost about 7.7%. The OPEC+ meeting was moved up to Saturday from the original plan of Monday, three sources told Reuters on Friday, although it was not clear why the meeting was rescheduled. Members of the group, which includes the Organization of the Petroleum Exporting Countries and its allies, are deliberating whether to make another accelerated oil output increase in June or stick with a smaller hike, two of the sources said. Either way, oil traders braced for more supply from the group, at a time when fears of an economic slowdown caused by a trade war between the U.S. and China have prompted market experts to lower demand growth expectations for this year. "This market is all about OPEC now with even the tariff war taking a back seat," United ICAP energy specialist Scott Shelton said. Reuters reported this week that officials from Saudi Arabia, the de facto leader of OPEC+, have briefed allies and industry experts that they are unwilling to prop up oil markets with further supply cuts. OPEC+ is currently cutting output by over 5 million barrels per day. Traders were also cautious given the possibility of a de-escalation of the trade dispute between China and the U.S. States, after Beijing on Friday said it was evaluating a proposal from Washington to hold talks to address U.S. President Donald Trump's tariffs. "There is some optimism when it comes to U.S.-China relations but the signs are only very tentative," Harry Tchilinguirian, group head of research at Onyx Capital Group, said. Friday's oil price decline was kept in check by rising equity markets, UBS analyst Giovanni Staunovo said, as Wall Street climbed after U.S. jobs data showed payrolls increased more than expected last month. A threat by Trump on Thursday to impose secondary sanctions on buyers of Iranian oil also helped ease some of the pressure on oil prices, as it could tighten global supply. The threat, which came after U.S. talks with Iran over its nuclear programme were postponed, could also complicate trade talks with China, which is the world's largest importer of Iran's crude. Signs of slowing U.S. oil output growth could also be somewhat supportive for oil prices from a longer-term point of view, StoneX oil analyst Alex Hodes said. US drillers cut the number of oil rigs operating for the first time in three weeks, data from oilfield services provider Baker Hughes showed. The oil rig count, an early indicator of future output, fell by four to 479 this week. (Reporting by Shariq Khan, Anna Hirtenstein, Robert Harvey and Mohi Narayan; Editing by Nia Williams Editing by Marguerita Choy and Barbara Lewis) - Reuters
Business Times
02-05-2025
- Business
- Business Times
Oil posts biggest weekly loss in a month ahead of Opec+ meeting
[NEW YORK] Oil prices fell more than 1 per cent lower on Friday (May 2) and recorded their biggest weekly losses since the end of March, as traders turned cautious ahead of an Opec+ meeting to decide the group's output policy for June. US West Texas Intermediate (WTI) crude futures settled 95 US cents or 1.6 per cent to settle at US$58.29 a barrel. Brent crude futures closed down 84 cents or 1.4 per cent at US$61.29 a barrel. For the week, Brent fell over 8 per cent and WTI lost about 7.7 per cent. The Opec+ meeting was moved up to Saturday from the original plan of Monday, three sources told Reuters on Friday, although it was not clear why the meeting was rescheduled. Members of the group, which includes the Organization of the Petroleum Exporting Countries and its allies, are deliberating whether to make another accelerated oil output increase in June or stick with a smaller hike, two of the sources said. Either way, oil traders braced for more supply from the group, at a time when fears of an economic slowdown caused by a trade war between the US and China have prompted market experts to lower demand growth expectations for this year. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'This market is all about Opec now with even the tariff war taking a back seat,' United Icap energy specialist Scott Shelton said. Reuters reported this week that officials from Saudi Arabia, the de facto leader of Opec+, have briefed allies and industry experts that they are unwilling to prop up oil markets with further supply cuts. Opec+ is currently cutting output by more than five million barrels per day. Traders were also cautious given the possibility of a de-escalation of the trade dispute between China and the US, after Beijing on Friday said it was evaluating a proposal from Washington to hold talks to address US President Donald Trump's tariffs. 'There is some optimism when it comes to US-China relations but the signs are only very tentative,' Harry Tchilinguirian, group head of research at Onyx Capital Group, said. Friday's oil price decline was kept in check by rising equity markets, UBS analyst Giovanni Staunovo said, as Wall Street climbed after US jobs data showed payrolls increased more than expected last month. A threat by Trump on Thursday to impose secondary sanctions on buyers of Iranian oil also helped ease some of the pressure on oil prices, as it could tighten global supply. The threat, which came after US talks with Iran over its nuclear programme were postponed, could also complicate trade talks with China, which is the world's largest importer of Iran's crude. Signs of slowing US oil output growth could also be somewhat supportive for oil prices from a longer-term point of view, StoneX oil analyst Alex Hodes said. US drillers cut the number of oil rigs operating for the first time in three weeks, data from oilfield services provider Baker Hughes showed. The oil rig count, an early indicator of future output, fell by four to 479 this week. REUTERS
