CANADA Act Exempts Small Businesses from Emergency Import Duties: A Tariff Break for Main Street

The newly introduced Creating Access to Necessary American-Canadian Duty Adjustments Act—or the CANADA Act, for short—is taking aim at specific import costs hitting small businesses. This bill immediately targets certain duties that were slapped on imports following the national emergency declared back in February 2025 (specifically, the duties put in place under Executive Order 14193 and its later updates).

The Small Business Tariff Lifeline

What this bill does is create a specific carve-out for small businesses. If you fit the official definition of a “small business concern” under Section 3 of the Small Business Act—the same one the SBA uses—you are now exempt from paying those emergency-related import duties. This applies whether your business imports the goods directly or if the goods are imported specifically for your use (SEC. 2).

Think about the small manufacturer who relies on imported components, or the local boutique sourcing unique materials from overseas. Before this, they were paying the emergency tariff, which acted like a hidden tax on their cost of goods. This exemption means a direct reduction in their operational costs, making it easier to manage inventory and potentially keeping prices stable for consumers. For a small business owner already juggling rising wages and supply chain headaches, this is real, tangible financial relief.

Who Wins and Who Pays?

This move is a clear win for Main Street businesses that rely on international trade. It levels the playing field slightly, as larger corporations that don't qualify as a “small business concern” will still be required to pay the emergency duties. This means the large retail chains or massive manufacturers continue to face the higher import costs, while their smaller competitors get a break.

The cost of this relief, however, falls to the U.S. Treasury, which will see reduced revenue from those specific tariffs. This is a trade-off: supporting small business viability during times of economic emergency versus maintaining tariff revenue. Since the bill uses the existing, established definition of a small business, it keeps the rules clear and reduces the chances of larger entities trying to sneak through the loophole. This clarity is a good sign for smooth implementation.