A New Jersey-based food importer has filed a lawsuit challenging President Donald Trump’s authority to impose 50% tariffs on Canadian goods under a Depression-era trade law. Gellert Global Group, a third-generation family business specializing in Canadian cheese imports, filed the suit Tuesday in the U.S. Court of International Trade, alleging the tariffs violate executive authority and harm American businesses.
The lawsuit, led by the Liberty Justice Center, seeks to overturn the tariffs imposed under Section 338 of the 1930 Tariff Act, which the Trump administration invoked in August following the collapse of U.S.-Canada trade talks. The tariffs apply to $20 billion worth of Canadian goods, including dairy products, wine, honey, and hockey sticks. Gellert Global Group, which faces 50% tariffs on Canadian cheese imports, argues the levies disrupt supply chains and impose immediate financial harm.
Section 338 Tariffs: Legal and Economic Impact
The Trump administration justified the tariffs under Section 338, a rarely used provision aimed at addressing foreign trade discrimination. The White House has not yet responded to requests for comment on the lawsuit. The administration’s use of the law marks the first time it has been applied in a trade dispute, raising questions about its legal precedent.
Gellert Global Group’s lawsuit contends that Section 338 does not authorize sweeping tariffs in response to trade disputes, arguing the executive branch overstepped its authority. The firm, which also faces retaliatory tariffs from Canada on U.S. cheese exports, stated the tariffs disrupt decades-long supplier and customer relationships. Thomas Gellert, co-chief executive, said the measures create "costs and uncertainty that ripple through the entire supply chain."
Broader Trade War Context
The tariffs are part of an escalating trade conflict between the U.S. and Canada. In response to the U.S. levies, Canada imposed retaliatory tariffs on American goods, including dairy and motorcycles. The dispute follows a pattern of heightened trade tensions under the Trump administration, which has previously used other trade laws to impose broad tariffs, including a 1977 statute that was struck down by the Supreme Court in February.
The Liberty Justice Center, representing Gellert Global Group, has been involved in multiple legal challenges against Trump’s tariff policies. The group successfully contested the administration’s "reciprocal" tariffs earlier this year, leading to a Supreme Court ruling that forced the government to refund $166 billion in collected duties. Sara Albrecht, CEO of the Liberty Justice Center, stated, "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."
Legal and Political Implications
The lawsuit challenges the administration’s interpretation of Section 338, which has never been tested in court for tariff enforcement. Legal experts note that the case could set a precedent for future executive trade actions. The outcome may also influence ongoing trade negotiations between the U.S. and Canada, which have seen repeated disputes over agricultural and industrial goods.
Gellert Global Group’s legal challenge underscores broader concerns about the use of emergency trade laws to bypass congressional approval. The case joins a growing number of lawsuits questioning the scope of presidential authority in trade policy, reflecting tensions between executive actions and legislative oversight.