^{Photo: The Guardian}

In a rare show of bipartisan cooperation, Republican Senators Susan Collins of Maine and Lisa Murkowski of Alaska have joined forces with Democrats to introduce legislation that would exempt millions of small U.S. businesses from President Donald Trump’s aggressive tariffs on Canadian imports.

The proposed measure—officially named the Creating Access to Necessary American-Canadian Duty Adjustments (CANADA) Act—was introduced by Senator Peter Welch (D-Vt.) and backed by key Democrats including Senate Minority Leader Chuck Schumer and Sen. Ron Wyden, the top Democrat on the Senate Finance Committee.

The bill directly challenges Trump’s 25% blanket tariff on Canadian goods and a 10% duty on Canadian energy imports announced earlier this year. The move comes amid growing economic anxiety across industries that rely heavily on U.S.-Canada trade.

Tariffs Could Hit Small Businesses Hard

If enacted, the CANADA Act would make the current tariffs non-applicable to goods imported by or for the use of small businesses, using federal definitions for “small business concerns.” According to the Small Business Administration, there are more than 33 million small businesses in the U.S., many of which depend on affordable access to Canadian goods.

“Imposing tariffs on Canada, Maine’s closest trading partner, threatens jobs, drives up costs, and hurts small businesses that have long relied on cross-border cooperation,” said Senator Collins. Canada remains the top export destination for at least 32 U.S. states, according to the Office of the U.S. Trade Representative.

Senator Murkowski echoed those concerns: “I’ve heard loud and clear from small businesses in Alaska: tariffs are forcing prices to rise and making it difficult to plan long-term.”

Trump’s Tariff Strategy: Retaliation, Exemptions, and Escalation

The Trump administration first imposed the current round of Canada tariffs on February 1, citing national security concerns and alleged failures by Canada to curb drug and crime flow at the northern border. The tariffs were briefly paused after former Canadian Prime Minister Justin Trudeau pledged policy cooperation.

Trump has since amended and expanded the tariffs through multiple executive orders:

• On March 2, he delayed ending the de minimis exemption, which allowed low-value Canadian goods to enter the U.S. duty-free.
• On March 4, the 25% blanket tariffs officially went into effect, with Canada and Mexico retaliating swiftly.
• On March 5, Trump paused tariffs on U.S. automakers for USMCA-compliant vehicles.
• By April 2, Ottawa found itself excluded from a separate round of “liberation day” tariffs—global duties of up to 10% on dozens of countries.

Despite these carve-outs, Canada continues to face heavy tariffs on exports of steel, aluminum, and automobiles, which are key components of the country's trade portfolio.

Economic and Political Fallout Intensifies

The timing of the new bipartisan bill is critical. Trump has threatened to impose a 35% blanket tariff on all Canadian imports starting August 1, unless Canada meets certain, still-vague demands. These new duties would drastically escalate trade tensions with America’s closest ally and largest energy supplier.

According to Senator Welch, the economic impact of these policies is already being felt. “Vermonters really love Canadians, and are very upset about what has happened to the relationships many of our businesses have built up over the years,” he said in an interview. He also noted a significant drop in Canadian tourism to Vermont, which is affecting the local hospitality industry.

Meanwhile, Canada has refused to include changes to beef and rice imports as bargaining chips in the ongoing trade negotiations, signaling Ottawa’s unwillingness to compromise on key domestic interests.

Next Steps and Legislative Outlook

The White House has yet to comment on the CANADA Act, and it remains unclear whether President Trump would sign the bill if it passes both chambers. However, bipartisan support could pressure the administration to soften its trade stance, at least where small businesses are concerned.

With time running out before the next tariff wave, the bill may serve as a political bellwether for where trade policy heads next—and how much pushback the Trump administration can expect from within its own party.

For now, American small businesses sit in a precarious position: caught between international trade friction and the uncertain future of U.S.-Canada economic ties.

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