Lawsuit Challenges Trump's 50% Tariffs on Canadian Goods

President Donald Trump's decision to impose 50% tariffs on a variety of Canadian products has sparked a new legal challenge. On Tuesday, Gellert Global Group, a New Jersey-based food importer, filed a lawsuit in the U.S. Court of International Trade contesting the administration's use of a nearly century-old law to enforce these steep duties.

The tariffs, announced in July 2026, affect items such as Canadian hockey sticks, wine, honey, wigs, and notably, cheeses imported by Gellert Global. These tariffs were enacted under Section 338 of the Tariff Act of 1930, marking the first time this 96-year-old statute has been used in this way. The law was invoked as a response to what the Trump administration described as discriminatory trade practices by Canada.

According to the lawsuit, Section 338 is an outdated law designed for retaliation-based tariff policies that have since been superseded or effectively repealed by later legislation. The complaint seeks a declaration from the court that the tariffs are unlawful, an injunction against their enforcement, and requests that the administration refund duties already paid, including interest.

Gellert Global is represented by the Liberty Justice Center, the same legal organization that successfully challenged Trump's previous "reciprocal" tariffs. Those tariffs were struck down by the Supreme Court earlier this year, leading the government to begin refunds of approximately $166 billion collected from importers.

The Liberty Justice Center is simultaneously involved in two other lawsuits regarding the administration's use of trade laws. Sara Albrecht, CEO of the group, emphasized that the issue transcends the current president, stating, "No president should have the power to pull a dormant statute off the shelf and use it to impose sweeping tariffs or import bans without the limits Congress required." As of now, the White House has not issued a comment regarding this latest lawsuit.

The tariffs came into effect on August 22, following the breakdown of last-minute trade negotiations between U.S. and Canadian officials in Washington. In retaliation, Canada implemented equivalent tariffs on American goods.

The lawsuit challenges the administration’s justification for the tariffs, arguing the legal criteria under Section 338 were not met. The law mandates that tariffs can only be imposed if it is established as a fact that a foreign country unfairly imposes charges or trade restrictions on U.S. products or applies customs rules that disadvantage American goods.

Furthermore, the complaint contends that the Canadian measures cited in the Trump proclamations do not amount to discrimination. It points out that two of these measures were Canada’s responses to U.S. tariffs previously deemed unlawful by the Supreme Court, and that retaliation cannot be equated with discrimination. Another issue raised relates to dairy quota provisions negotiated under the United States-Mexico-Canada Agreement (USMCA), which actually grant U.S. cheese better access to the Canadian market than most other countries.

Gellert Global is described in the filing as a significant player in the U.S. food import market, generating over $1.7 billion in annual revenue. The company imported $71 million worth of Canadian cheese in 2025 without paying tariffs under USMCA. However, following the Section 338 tariffs, it now faces a 50% duty on these imports, which the suit estimates will amount to an additional $40 million annually.

While Gellert Global plans to absorb these costs until the end of the year, it warns that the situation is unsustainable in the long term. The company foresees potential consequences including higher product prices, loss of sales, diminished customer loyalty, and supply chain disruptions. Increased costs could force producers to reduce output or exit the market, further impacting availability and pricing.

This legal challenge highlights ongoing tensions in U.S.-Canada trade relations and raises questions about the limits of executive power in imposing tariffs. The dispute also underscores the complexities introduced by overlapping trade laws and the balancing act required to maintain fair international commerce. As the case proceeds, it will be closely watched by businesses and policymakers concerned about the future of North American trade agreements and tariff enforcement.