Two GOP Senators and Democrats Back CANADA Act to Exempt Small Businesses from Trump's 35% Tariffs

Two Republican senators, Susan Collins (R-Maine) and Lisa Murkowski (R-Alaska), joined Democratic lawmakers in endorsing the Creating Access to Necessary American-Canadian Duty Adjustments (CANADA) Act, a bipartisan proposal to exempt U.S. small businesses from President Donald Trump’s impending 35% tariffs on Canadian imports. The legislation, introduced by Vermont Democrat Peter Welch and backed by Senate Minority Leader Chuck Schumer and Finance Committee Chair Ron Wyden, aims to shield enterprises reliant on cross-border trade from economic strain [1]. The measure would nullify the 25% surtax on most Canadian goods and the 10% energy tariff announced in February 2025, while requiring congressional oversight of future tariffs [2].

The White House has not confirmed whether Trump would sign the exemption, though the bill underscores growing bipartisan resistance to trade policies harming border states. Canada, the largest foreign market for nearly 30 U.S. states, is a critical trade partner for Maine, Alaska, and Vermont, where local businesses have reported rising costs and disrupted supply chains. Collins emphasized the threat to “jobs and long-term planning,” while Murkowski noted that small businesses in her state have faced “unprecedented difficulty” due to price hikes [1]. Welch added that the tariffs risk damaging U.S.-Canada relationships, citing a decline in Canadian tourism that has hurt hotels, restaurants, and retailers [2].

The economic fallout is already evident. Industry data show a 33% drop in Canadian car returns to the U.S. and a 22% decline in air travel to American destinations in June 2025 compared to the prior year [2]. Business leaders, including Edmund Schweitzer of Schweitzer Engineering Laboratories, warn of significant financial blows, with potential losses of $100 million in unanticipated taxes for his company and $14,000 per employee [2]. The tariffs also reignited tensions after Trump initially blamed Canada for border crime, though Ottawa’s swift response led to a 30-day suspension of the duties [1].

The bipartisan push reflects broader criticism of executive overreach in trade policy. The CANADA Act aligns with earlier calls to limit unilateral tariff actions, such as exemptions under the USMCA agreement [4]. However, the move has drawn scrutiny for targeting swing-state constituencies, with 4 Republicans joining Democrats in a Senate vote against the measures [2]. While proponents argue the legislation preserves U.S.-Canada economic ties, critics warn it could establish precedents for legislative intervention in future trade disputes.

As the bill moves to congressional review, its fate hinges on balancing domestic economic priorities with diplomatic relations. The White House’s stance remains unclear, and the administration has yet to address whether it would prioritize small business exemptions over broader tariff enforcement. For now, the CANADA Act symbolizes a rare bipartisan effort to mitigate the fallout of Trump’s trade agenda, even as the debate over executive authority and cross-border cooperation continues.

Source:

[1] [Trump Canada tariffs: GOP senators back bill exempting...](https://www.cnbc.com/2025/07/23/trump-canada-tariffs-small-business-bill.html)

[2] [Senator says U.S. tariffs from Trump White House...](https://www.delta-optimist.com/national-news/senator-says-us-tariffs-from-trump-white-house-damaging-for-washington-state-10983692)

[4] [Tariffs in the second Trump administration](https://en.wikipedia.org/wiki/Tariffs_in_the_second_Trump_administration)