10/20/2026
The new lawsuit advances a straightforward argument: Even if Section 338 survives legal scrutiny, the administration failed to satisfy the law’s requirements when it targeted Canada.
Under the statute, the lawsuit argues, tariffs are permitted “only upon finding ‘as a fact’” that a foreign country imposes unequal and unreasonable charges or trade restrictions on U.S. products, or otherwise uses customs rules to unfairly disadvantage the United States.
Even when those conditions are met, the law limits the president’s authority. He may impose only such duties “as he shall determine will offset such burden or disadvantage,” the complaint states.
According to Gellert Global, the Canadian actions cited in Trump’s proclamations do not meet that standard.
Two of the cited actions, the lawsuit contends, are Canada’s responses to tariffs imposed by Trump himself, including measures the Supreme Court has ruled unlawful. Retaliation against U.S. trade measures, the company argues, is not the same as discrimination against American goods.
The other major issue involves dairy quotas negotiated under the United States-Mexico-Canada Agreement (USMCA), the trilateral trade deal between the United States, Canada, and Mexico. Far from disadvantaging American producers, those terms “give American cheese better access to Canada than the cheese of most of the world receives,” the lawsuit states.
In other words, the complaint argues, the administration is using a law designed to address discriminatory foreign trade practices to punish Canada for actions that do not meet the legal standard.
A new lawsuit filed Tuesday challenges President Donald Trump’s use of a nearly century-old law to impose sweeping 50% tariffs on Canadian goods, raising fresh questions about the legality of his aggressive trade tactics.
In July, Trump invoked Section 338 of the Tariff Act of 1930 to impose steep duties on Canadian hockey sticks, w**e, honey, wigs, and other products, citing alleged trade discrimination by Ottawa. The move marked the first time in the law’s 96-year history that it had been used to impose tariffs.
Now, Gellert Global Group, a New Jersey-based food importer, is fighting back. The company says its cheeses are subject to the tariffs and is asking the court to declare them unlawful, block their enforcement, and order the Trump administration to refund duties already collected, with interest.
The case is being brought by the Liberty Justice Center, the same legal organization that scored a major victory against Trump’s trade agenda by successfully challenging his so-called “reciprocal” tariffs.
The new lawsuit advances a straightforward argument: Even if Section 338 survives legal scrutiny, the administration failed to satisfy the law’s requirements when it targeted Canada.
Under the statute, the lawsuit argues, tariffs are permitted “only upon finding ‘as a fact’” that a foreign country imposes unequal and unreasonable charges or trade restrictions on U.S. products, or otherwise uses customs rules to unfairly disadvantage the United States.
Even when those conditions are met, the law limits the president’s authority. He may impose only such duties “as he shall determine will offset such burden or disadvantage,” the complaint states.
According to Gellert Global, the Canadian actions cited in Trump’s proclamations do not meet that standard.
Two of the cited actions, the lawsuit contends, are Canada’s responses to tariffs imposed by Trump himself, including measures the Supreme Court has ruled unlawful. Retaliation against U.S. trade measures, the company argues, is not the same as discrimination against American goods.
The other major issue involves dairy quotas negotiated under the United States-Mexico-Canada Agreement (USMCA), the trilateral trade deal between the United States, Canada, and Mexico. Far from disadvantaging American producers, those terms “give American cheese better access to Canada than the cheese of most of the world receives,” the lawsuit states.
In other words, the complaint argues, the administration is using a law designed to address discriminatory foreign trade practices to punish Canada for actions that do not meet the legal standard.
The financial stakes are enormous. Under the Section 338 tariffs, Gellert Global says it now pays a 50% duty on the entered value of its Canadian cheese, adding an estimated $40 million a year to its costs.
That is a steep price for a company to pay under a policy whose legal foundation is now being challenged in court.
At its core, the lawsuit asks a fundamental question: Can a president wield a decades-old trade law to impose punishing tariffs without meeting the very conditions Congress established?
For Gellert Global, and for Canada, the answer should be no.
Do you think the Liberal Justice Center will be successful in scoring another victory? Drop your thoughts below.