In Senate Small Business Hearing, Democrats Bemoan Tariff “Chaos” as Republicans Increasingly Accept New Thinking on Trade

The Democratic Party’s rank and file, in both houses of congress, were largely cautious of the North American Free Trade Agreement back in the early 1990s. They were worried that American labor would easily lose out to Mexican labor. They were right to be worried, and their fears played out over time, of course. But fast forward to 2025 and tariffs are seen by Democrats as “a small business crisis.”

Every Democrat in the U.S. Senate Committee on Small Business and Entrepreneurship hearing on Wednesday titled “Fueling America’s Manufacturing Comeback” was against what they consistently refer to as “Trump’s tariffs.” Like previous hearings in other legislative committees on the subject, tariffs were also causing “chaos.” There is a clear division now between the two parties on trade. Although many leading Democrats say they want to reshore, they almost unanimously disagree with this new global tariff strategy, a strategy that began in 2017 and really only targeted China at the time.

“I think we all support bringing back manufacturing to the United States,” Sen. Jeanne Shaheen (D-NH) told the one witness on the day, Small Business Administration (SBA) senior executive Kelly Loeffler. Shaheen said SBA loan programs “help us build the manufacturing sector.” But she then proceeded to express disdain for the ongoing trade dispute between the U.S. and Canada over Section 232 tariffs, saying a New Hampshire constituent that owns a bakery went from over 20 employees down to two – all thanks to tariffs.

The U.S. does not have any tariffs on Canadian goods other than cars and car parts that do not meet USMCA content requirements agreed upon years ago. Otherwise, Canadian made cars come into the U.S. duty free. Steel and aluminum tariffs do not single out Canada, they are set for everybody. Even free trade partner South Korea is subject to them, but South Korea did not retaliate. Canada did, and that included goods not covered by the U.S. Section 232 tariffs. In other words, those are Canada’s tariffs on New Hampshire goods that the U.S. allows for duty free entry from Canada. Sen. Shaheen should take this up with the Canadians, as Canada has more tariffs on the U.S. than the U.S. has on Canada.

Sen. John Hickenlooper (D-CO) said small businesses were “in a state of terror.” He cited outdoor equipment and apparel companies who are wholly dependent on imports. If those imports came from China, they were either paying 145% tariffs, or are now paying 55%. But everywhere else in the world is 10%, to which Hickenlooper said the number was “an unsupportable burden” and he didn’t understand it. This is all despite Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick spending countless hours on mainstream news programs confirming that the 10% was a revenue tariff.

Hickenlooper then said Colorado companies should source from CAFTA-DR, which of course, they already can. And the tariff will be 10% with currencies in the Dominican Republic and Central America worth pennies on the dollar. One dollar will get you roughly 58 pesos in the Dominican Republic, where textile workers make about $300 per month. “You might not think making socks is a good job, but I know of textiles made in America,” said Loeffler. “We make things here. This narrative that we cannot make things here affordably is false,” she said.

According to Loeffler’s written testimony, the SBA has seen manufacturing loan approvals increase by 74% in their 7(a) and 504 loan programs in the first 100 days of Trump’s presidency – compared to the first 100 days of Biden’s presidency. “Our producers are hiring again, investing again, and growing again. Our economy is spring-loaded for growth, especially on Main Street,” she said, contradicting what Ranking Member Ed Markey (D-MA) had said in his opening remarks.

Chairwoman Joni Ernst (R-IA) set the table nicely, despite the partisan divide.