US Court Challenge to Trump’s 50% Tariffs on
Selected Canadian Imports
Once again, the president’s ability to
wage a trade war without Congress will come before a court that has repeatedly
ruled against him.
·
New lawsuit filed: The
Liberty Justice Center has filed its fourth major
legal challenge against President Donald Trump’s tariffs, seeking to invalidate
the 50% duties imposed on selected Canadian imports.
·
Legal provision challenged: The
lawsuit targets the administration’s use of Section 338 of the Tariff Act of
1930, a rarely used provision permitting tariffs against countries accused
of imposing discriminatory or unequal trade restrictions on US goods.
·
First use of Section 338: Trump
became the first US president to invoke this authority in September 2026 as
part of the ongoing trade dispute with Canada.
·
Affected Canadian products: The 50%
tariffs cover a limited but changing range of imports, including:
o
Alcoholic beverages
o
Dairy products, including cheese
o
Hockey sticks
o
Paper products
o
Other selected Canadian goods
·
Business seeking relief: The
Liberty Justice Center filed the lawsuit on behalf of
Gellert Global Group, a New Jersey-based food importer and distributor.
The company estimates that tariffs on Canadian cheese could cost it
approximately $40 million annually.
·
Main legal arguments: The
lawsuit contends that:
1.
Trump exceeded his statutory authority when
imposing the tariffs.
2.
The administration failed to comply with the
procedural requirements governing their implementation.
3.
The Canadian trade practices cited as justification
do not constitute unlawful discrimination.
4.
Section 338 should not be used to bypass safeguards
established under later trade legislation.
5.
The administration's actions improperly exercise
tariff powers constitutionally assigned to Congress.
·
Difference between Sections 338 and 301:
o
Section 338 of the Tariff Act of 1930: Allows
tariffs in response to certain discriminatory or unequal foreign trade
practices, subject to the statute's requirements.
o
Section 301 of the Trade Act of 1974: Provides
a framework for responding to unfair foreign trade practices and requires an
investigation before the administration imposes measures under that authority.
The lawsuit argues that Trump used Section 338 to
avoid the more extensive investigative and procedural safeguards associated
with Section 301.
·
Court hearing the case: The
dispute will be considered by the US Court of International Trade, which
has previously ruled against several of Trump's tariff measures.
·
Possible financial consequences: If the
challenge succeeds, the administration could be required to refund unlawfully
collected duties, potentially with interest. The ruling could also restrict the
administration's ability to use Section 338 against Canada or other trading
partners.
·
Previous tariff litigation: The
Liberty Justice Center and other challengers have
contested several earlier tariff measures, including:
o
Duties imposed under an economic emergency law at
the beginning of Trump's second term.
o
A temporary 10% global tariff introduced as a
replacement.
o
Additional tariffs imposed on dozens of countries
under Section 301.
The Supreme Court ruled against the
administration's earlier emergency-law tariff measures in February 2026,
according to the report. A separate challenge to the administration's Section
301 tariffs remained unresolved at the time of the article.
·
Impact on US–Canada trade: The
tariffs have prompted Canadian retaliation, creating a cycle of escalating
trade restrictions that threatens businesses and supply chains in both
countries.
Effect of
the Lawsuit
1.
If the lawsuit succeeds: The 50%
tariffs challenged in the case could be invalidated, potentially requiring
refunds of duties collected under the affected measures.
2.
If the administration prevails: The
ruling could strengthen the president's ability to use Section 338 to impose
tariffs without following the same investigative process required under Section
301.
3.
For US importers: A
favourable ruling could reduce costs for companies importing Canadian products,
particularly cheese and other affected goods.
4.
For Canada: The case could influence the
scope of US tariff restrictions and the future course of the bilateral trade
dispute.
5.
For US trade policy: The
litigation raises a broader constitutional question about the division of
tariff-making powers between Congress and the president.
Bottom line: The
lawsuit challenges Trump's use of a rarely invoked 1930 trade law to impose 50%
tariffs on selected Canadian imports. Its outcome could determine whether the
administration can continue using Section 338 as an alternative route to
imposing tariffs without the more extensive procedural safeguards associated
with Section 301. The case remains a legal challenge; the tariffs have not been
invalidated merely because the lawsuit was filed.
A
legal group that has successfully sued to scuttle President Trump’s past tariffs
filed another court challenge on Tuesday, this time targeting the steep duties that
he has imposed as part of an ongoing trade war with Canada.
The
lawsuit marked the fourth major case brought by the Liberty Justice Center, which once again asked a panel of federal judges to
invalidate Mr. Trump’s actions on grounds that he had overstepped the law in ways
that harmed American businesses.
The
emerging battle concerned the president’s use of Section 338 of the Tariff Act
of 1930, a long-dormant section of a decades-old trade statute meant to protect
U.S. industry from unreasonable foreign practices. In September, Mr. Trump became
the first president to enforce that power as part of a trade spat with Canada, which
he has accused of discriminating against American industries.
The
president’s tariffs, set at 50 percent, applied to a small yet shifting set of Canadian
imports, including some alcoholic beverages, dairy products, hockey sticks, paper
goods and more. Mr. Trump chose those items based on a belief that Ottawa had applied
undue burdens to certain categories of U.S. products, a move that quickly prompted
Canada to retaliate — and set off a tit-for-tat cycle that threatened to damage
both economies.
The
Liberty Justice Center filed its lawsuit on behalf of
Gellert Global Group, a food importer and distributor based in New Jersey, which
said it could face an estimated $40 million annually in taxes applied to Canadian
cheese. The case challenged both Mr. Trump’s specific implementation of the duties
and the broader constitutionality of Section 338.
The
fate of Mr. Trump’s tactics now rests with the Court of International Trade, a specialized
circuit that has repeatedly ruled against the White House and its tariffs in recent
months. A victory could further embolden Mr. Trump against Canada or other countries,
while a defeat would force the administration to pay back the money it has collected.
“The
Section 338 tariffs are the administration’s latest attempt to exercise, through
a statute never designed for the purpose, the tariff power that the Constitution
assigns to Congress,” the lawsuit argued.
The
White House did not immediately respond to a request for comment.
The
lawsuit over Section 338 marked the latest legal headache for Mr. Trump and his
economic agenda, which relies on sweeping tariffs to boost domestic manufacturing
and raise new revenue. To date, the president’s multiple losses in court have backfired
in one key respect, forcing the administration to pay back billions of dollars,
plus interest, in illegally collected duties.
The
string of defeats began with Mr. Trump’s use of an economic emergency law at the
start of his second term to impose stiff duties on nearly every U.S. trading partner.
The move drew a challenge by the Liberty Justice Center
along with other businesses and state officials, which together prevailed at the
Supreme Court in February.
Mr.
Trump then imposed a 10 percent duty globally as a temporary replacement, only to
draw successful lawsuits from some of the same opponents. They also targeted Mr.
Trump’s third set of duties applied this year to dozens of countries, all accused
of unfair trade practices. That case reached the Court of International Trade in
late September.
The
fight centered on Section 301 of the Trade Act of 1974,
which has been used by presidents of both parties to impose tariffs in response
to unfair foreign trade practices. While the law itself is uncontroversial, a panel
of judges seemed skeptical during oral arguments about
Mr. Trump’s specific use of it, though the court has not yet ruled on the matter.
A
precursor to that law is Section 338, which permits tariffs on countries that place
“unequal impositions or discriminations” on American goods but not on the rest of
the world. In a series of proclamations dating back to the summer, Mr. Trump accused
Canada of such practices, then later invoked a lesser-known provision of that same
law to ban some Canadian imports entirely.
In
its new lawsuit, the Liberty Justice Center claimed that
Mr. Trump’s proclamations did not follow the letter of the law, citing a series
of what it called procedural mishaps with the timing and rollout of the duties.
It said that the Canadian practices identified by Mr. Trump as problematic — the
justification for his tariffs under the law — were, in fact, “not discrimination.”
The
center also questioned whether the statute itself had
essentially been rendered obsolete, pointing out the legal and legislative history
that ultimately yielded Section 301.
To
successfully invoke that section, the administration must first complete a full
investigation that documents another country’s unfair practices. But, instead, by
opting to use the more outdated Section 338, Mr. Trump essentially sought to speed
up his ability to impose tariffs, according to the lawsuit, which accused the president
of circumventing the will of Congress in the process.
“Congress
did not intend to leave in place a parallel authority that would allow the president
to impose the same remedies, for the same conduct, free of every one of those safeguards,”
according to the lawsuit.