Trump’s 50% Canada tariffs are now facing a lawsuit after a New Jersey food importer sued Tuesday to have them thrown out and its money refunded.
The suit was filed by Gellert Global Group, a food importer that brings Canadian cheese into the U.S. and brings in $1.7 billion a year. The nonprofit Liberty Justice Center filed it on Gellert’s behalf in the U.S. Court of International Trade in New York, the federal court that handles fights over tariffs and trade.
A tariff is a tax on imported goods, paid by the American company bringing the product in. Gellert says it is paying a 50% tariff on Canadian cheese. It is also getting hit from the other side, because Canada answered Trump with its own tariffs on American goods, including the American cheese Gellert’s Canadian division sells there.
Trump put the 50% Canada tariffs on a wide range of goods over the summer, and they took effect in August. His administration says Canada treats American cars, alcohol and dairy unfairly.
The legal fight centers on how Trump did it. He used Section 338 of the Tariff Act of 1930, a law passed during the Great Depression. It lets a president add tariffs on countries that discriminate against American goods. According to the lawsuit, no president had ever used it to actually impose a tariff before now.
The suit argues the law is a relic that Congress effectively replaced with newer trade laws, including the same Trade Act Trump used for his forced labor tariffs earlier this year. Those newer laws come with rules and limits. “The administration cannot skip those protections by reaching for a 1930 statute that no president had ever used to impose a tariff,” the Liberty Justice Center said.
The suit also argues that even if the old law still stands, Trump did not follow it. Section 338 only allows tariffs that offset the harm a country is causing. Gellert says the Canadian policies the White House pointed to don’t justify 50% across the board.
Two of those policies, the suit says, are Canada’s responses to Trump’s own tariffs, including tariffs the Supreme Court already ruled unlawful. “Retaliation is not discrimination,” the lawsuit states. Another is Canada’s system for dairy imports, which follows terms negotiated in the USMCA, the trade deal between the U.S., Canada and Mexico that Trump signed during his first term. Those terms give American cheese better access to Canada than most of the world gets, according to the suit.
Liberty Justice Center has been here before. The group helped bring the challenge to Trump’s emergency powers tariffs, the “Liberation Day” and fentanyl tariffs on Canada, Mexico and China, which the Supreme Court struck down. Reuters counts this as the fourth time a sweeping tariff policy has been challenged in court.
The group says the case is bigger than Canada. If these tariffs stand, it argues, any president could use Section 338 to tax imports without real oversight from Congress, which the Constitution puts in charge of taxes and tariffs.
The White House says the lawsuit won’t change Trump’s commitment to American workers, farmers and businesses. U.S. Ambassador to Canada Pete Hoekstra said Tuesday that in the administration’s view, the two countries are not in a trade war. “We are negotiating some tariffs,” he said.
