Industry leaders warn that the breakdown in United States-Canada trade talks adds new uncertainty to project costs, materials, and deeply integrated supply chains
By Austin Keating
The phrase “trade war” may sound newly dramatic coming from Canadian leaders this month, but for the sheet metal industry, it is old news. As early as spring 2025, SMACNA National was warning that a “tariff-led trade war” was upending construction markets, driving immediate price spikes, and creating deep investment uncertainty. “The timing of the tariff-led trade war is particularly problematic,” SMACNA’s executive director of government and political affairs, Stan Kolbe, wrote at the time.
The new 50 percent American tariffs, covering nearly $20 billion in Canadian imports (about 5 percent of Canada’s exports to the United States, according to Associated Press), took effect at the end of August. The Section 338 tariffs are separate from existing Section 232 duties on steel, aluminum, and copper, which are expressly excluded from the additional duties. The new tariffs stem from three American actions targeting what the administration says is discriminatory Canadian treatment of American motor vehicles, alcoholic beverages, and dairy products. The tariff schedules, however, encompass hundreds of categories of goods. Canada announced dollar-for-dollar counter-tariffs to begin after Labor Day.
Both Carney and Ontario Premier Doug Ford used increasingly stark language, including “trade war” and “economic war,” marking a sharp escalation in public rhetoric. Carney said Canada was “being attacked” and invoked his earlier warning that the United States would try to “break us so they can own us.” Ford said Canada should be prepared to withhold electricity and critical minerals from the United States if the confrontation worsens, stating, “Everything is on the table.”
HVAC and Sheet Metal Industries Caught in the Crossfire
For metals-heavy HVAC and sheet metal trades, the broader tariff conflict is already a daily operational challenge. SMACNA has reported higher bid prices, longer lead times, and greater uncertainty for sheet metal and HVAC projects as tariffs affect steel and aluminum markets.
“Canada has long been our closest and most important trading partner,” Kolbe said. He warned that tariffs have already caused “harsh and unnecessary economic pain” for American workers and disrupted construction, metal fabrication, and HVAC equipment manufacturing. Kolbe noted that even contractors who support Buy American policies sometimes have no choice but to source Canadian metals and equipment because of project budgets and requirements, especially if the materials are USMCA-compliant.
SMACNA is now urging its members to review tariff provisions, change-in-law clauses, and force majeure language, and to consider adding price-escalation clauses into contracts, particularly as steel and aluminum tariffs continue to change.
On the labor side, SMART International is equally direct. “SMART strongly opposes the imposition of blanket tariffs that threaten jobs, raise costs, and disrupt the long-standing economic partnership between the United States and Canada,” said General President Michael Coleman. SMART, which represents workers on both sides of the border, has warned that tariffs threaten industries dependent on integrated North American supply chains. “We need trade policies that strengthen North American industries, protect union jobs,” Coleman said.
Tariffs Ripple Through Equipment Costs
The HVAC-specific picture is just as stark. According to the Air Conditioning Contractors of America (ACCA), steel, aluminum, and copper tariffs affect HVAC components including compressors, coils, cabinets, refrigerant lines, and electrical components. ACCA’s tariff resource lists Section 232 tariffs on primary steel, aluminum, and copper articles at 50 percent, with certain derivatives subject to different rates.
But the details are complicated. On June 1, 2026, the administration reduced the Section 232 tariff on certain residential HVAC equipment from 25 percent to 15 percent, with qualifying products containing at least 85 percent American-made steel or aluminum eligible for a 10 percent tariff. This carve-out, scheduled through December 2027, means not all HVAC goods are hit equally. ACCA is advising contractors to consider shorter quote-validity periods and tariff-adjustment clauses for longer projects, illustrating how tariff uncertainty is affecting basic business decisions.
Billions at Stake, Supply Chains in Question
The United Steelworkers union, which represents workers in both countries, says two-way steel trade alone is about $20 billion per year, with Canada exporting nearly $16 billion in aluminum to the United States in 2024. Because intermediate goods can cross the border during different stages of production, tariffs can potentially touch more than one point in an integrated supply chain.
“Existing tariffs continue to hurt Canadian steel, aluminum, copper, forestry, automotive, and other industries,” said Marty Warren, USW’s Canadian national director. He urged Canada to seek meaningful reductions in United States tariffs but not at the expense of Canadian jobs or industrial capacity. “No deal is better than a bad deal that sacrifices Canadian workers,” he said.
The Bigger Question
Can the United States untangle itself from Canadian supply chains without imposing major costs on the contractors, manufacturers, and workers the tariffs are supposed to help?
For HVAC and sheet metal, the answer is not theoretical. It is showing up in higher prices, longer lead times, and changing approaches to bids and contract language. With the window on negotiations closed, at least for the time being, the question for HVAC and sheet metal is whether the North American system they rely on is entering a fundamentally different era. ■
