Tariff Update: Recent Trade Developments and Their Impact on Elevator Costs

Last week, we published our analysis of how escalating tariffs were affecting the elevator industry, particularly the significant cost increases from the 25% steel and aluminum tariffs and the initial 145% tariffs on Chinese goods. Since then, there have been important developments in U.S. trade policy that will affect our industry and our clients' budgets.

On May 12th, the United States and China reached a breakthrough agreement that significantly reduces the tariff burden on both countries. The deal lowers U.S. tariffs on China from 145% to 30%, while China reduced its retaliatory tariffs on U.S. goods from 125% to 10%. This 90-day agreement represents a substantial de-escalation from the trade war that had threatened to severely disrupt supply chains across multiple industries.

What This Means for Elevator Components:

• Chinese-manufactured parts that were facing the 145% tariff now face a more manageable 30% rate

• Specialized components like high-performance motors, precision guide rails, and proprietary door mechanisms imported from China will see immediate cost relief

• Supply chain stability should improve as manufacturers can resume more predictable sourcing patterns

Steel and Aluminum Tariffs Remain in Place

While the China agreement provides significant relief, the 25% tariffs on steel and aluminum from all countries, including Canada, remain in effect. This continues to impact:

• Elevator rails and guide systems

• Structural supports and framing

• Door systems and mechanisms

• Cables and wire ropes

• Counterweights

• Cab interiors and control panels

Broader Trade Policy Uncertainty Continues

President Trump has indicated that approximately 150 countries are seeking to negotiate new trade deals with the United States, but the administration may not be able to accommodate all requests within the current timeframe. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick are expected to send letters to trading partners over the next 2-3 weeks, specifying what tariff rates countries will face if they don't secure negotiated deals.

What This Means for Elevator Industry Planning:

The ongoing uncertainty makes long-term cost planning challenging. While some relief has been achieved with China, European Union suppliers and other international partners may face different tariff structures in the coming weeks.

Economic Impact Assessment

Goldman Sachs has reduced the probability of a U.S. recession from 45% to 35% following the China trade breakthrough, citing lower-than-expected tariff levels. However, the imposed tariffs still amount to an average tax increase of nearly $1,200 per U.S. household in 2025, indicating that cost pressures remain significant across the economy.

Industry-Specific Implications

Immediate Cost Relief Areas:

• Control systems and electronic components from China

• Specialized machinery and precision manufacturing equipment

• Technology integration components for smart elevator systems

Continued Cost Pressure Areas:

• Structural steel components (25% tariff remains)

• Aluminum fixtures and panels (25% tariff remains)

• European-sourced components (subject to ongoing negotiations)

While the U.S.-China trade agreement provides welcome relief from the most extreme tariff levels, the elevator industry continues to navigate a complex and evolving trade environment. The 90-day timeframe for the current agreement, combined with ongoing negotiations with other trading partners, means that cost planning and supply chain management remain dynamic challenges.

At Keystone Elevator, we remain committed to helping our clients navigate these challenges while maintaining the highest standards of safety, quality, and service. The recent trade developments offer cautious optimism, but continued strategic planning and partnership with experienced service providers remains essential.

For updated information on how current trade policies may affect your specific elevator maintenance or modernization projects, contact Keystone Elevator today 781-340-3860 or service@keystoneelevator.com.

This analysis is based on publicly available information as of May 22, 2025. Tariff situations remain subject to change, and building owners should consult with appropriate financial and legal professionals regarding their specific circumstances.