HR-4899-119
Referred to the House Committee on Ways and Means.
Sponsored by Chris Pappas (D-NH)
What it does
This bill would exempt goods imported by or for the use of small business concerns — as defined by the Small Business Act — from the tariffs imposed under the national emergency declared by President Trump on February 1, 2025 (Executive Order 14193 and its amendments). It would not eliminate the tariffs for large importers or modify the underlying emergency declaration itself. Small businesses would pay the pre-tariff duty rates on Canadian goods they import.
Who benefits
Small businesses (defined under 15 U.S.C. 632, with size standards varying by industry) that import goods from Canada — including manufacturers, retailers, restaurants, and construction firms that rely on Canadian inputs such as lumber, steel, aluminum, and agricultural products. Consumers who purchase goods from small businesses that source from Canada may indirectly benefit through lower prices. Canadian exporters whose primary U.S. customers are small businesses would also benefit from maintained demand.
Who is hurt
Large U.S. importers and corporations that would remain subject to the tariffs, potentially facing a competitive disadvantage relative to small business competitors importing the same goods. Domestic producers of goods that compete with Canadian imports — such as U.S. lumber, dairy, and steel producers — who rely on the tariffs to reduce foreign competition would see that protection eroded for the small business segment. U.S. Customs and Border Protection would face administrative costs in verifying small business status for importers. The U.S. Treasury would forgo tariff revenue currently collected from small business importers.
Supporters argue
Supporters argue that small businesses, which lack the supply chain flexibility and financial reserves of large corporations, are disproportionately harmed by tariffs because they cannot easily absorb cost increases or shift to alternative suppliers. They contend that the tariffs were designed to address national security and trade imbalance concerns at the macro level, not to burden Main Street businesses that depend on cross-border supply chains built over decades of integrated U.S.-Canada trade under agreements like USMCA. Protecting small businesses from these costs, they argue, preserves jobs and economic activity in local communities without undermining the broader trade policy objective.
Opponents argue
Opponents argue that carving out small businesses from the tariff regime creates an uneven playing field that undermines the coherence and effectiveness of the trade policy — if the tariffs serve a legitimate national security or trade-balancing purpose, exempting a large class of importers weakens that purpose. They contend that determining small business eligibility at the point of import would be administratively complex and potentially subject to abuse, as businesses could restructure to qualify for the exemption. Critics may also argue that Congress should address tariff concerns through comprehensive trade legislation rather than piecemeal exemptions that leave the underlying emergency declaration intact.
Constitutional context
The Foreign Commerce Clause (Art. I, §8, cl. 3) gives Congress broad authority to regulate trade with foreign nations, including the power to set tariff policy. However, Congress has delegated significant emergency trade authority to the President through statutes like IEEPA, under which Executive Order 14193 was issued. This bill would exercise Congress's authority to limit or carve out exceptions to that delegated power — a constitutionally straightforward exercise of legislative authority, though the scope of IEEPA itself faces ongoing legal debate about whether it grants the President unlimited tariff authority.
Checks and balances
Congress would reclaim a narrow slice of tariff authority by limiting the President's emergency tariff order for one class of importers; the executive branch retains the emergency declaration and tariffs for all other importers, and U.S. Customs and Border Protection would implement and enforce the exemption.
Historical precedent
Congress has previously enacted targeted tariff exemption processes through the Miscellaneous Tariff Bill Act, which allows duty suspensions on specific goods, but a blanket exemption based on importer size rather than product type is not a well-established precedent in modern trade law.