Trump sued over Canadian tariffs in latest legal challenge

ByRachel Clun Business reporter, Reporting fromNew York.

Key points

• The lawsuit argues that Section 338 of the Tariff Act of 1930 has been superseded by Section 301 of the Trade Act of 1974.
• The White House imposed a 50% levy on some $20bn of Canadian goods after trade discussions between the US and Canada broke down in August.
• The lawsuit seeks to challenge the White House's reliance on retaliatory tariffs imposed by Canada to justify its own duties under Section 338.
• It additionally argues that if Section 338 still applies, the White House has not established the legal basis for the sweeping tariffs against Canada.
• Gellert Global Group is a third-generation family business that is paying 50% tariffs on cheese exported from Canada.

US President Donald Trump is facing another legal challenge on tariffs after the group that successfully sued over his so-called "liberation day" import taxes filed a new lawsuit over the latest Canadian levies.

For context, the White House imposed a 50% levy on some $20bn of Canadian goods after trade discussions between the US and Canada broke down in August.

In practice, the Liberty Justice Center filed a suit on behalf of US food business Gellert Global Group, urging the US Court of International Trade to find the levies unlawful and to order refunds with interest for affected importers.

Notably, the lawsuit argues the White House exceeded its authority in imposing the tariffs and caused "immediate harm to American businesses". The White House has been contacted for comment.

Gellert Global Group is a third-generation family business that is paying 50% tariffs on cheese exported from Canada. The New Jersey-based firm is additionally facing retaliatory tariffs from Canada on American-made cheese it sells north of the border.

Co-chief executive Thomas Gellert remarked the firm had spent generations building relationships with suppliers and customers in the food industry.

"These tariffs disrupt those relationships overnight and create costs and uncertainty that ripple through the entire supply chain, " he remarked on Tuesday.

Notably, the Liberty Justice Center is challenging the administration's employ of Section 338 of the 1930 Tariff Act to hit Canadian goods from wine to dairy products and hockey sticks.

That section of the almost 100-year-old Act is aimed at protecting US business against foreign discrimination, but the legal group is arguing that it does not allow the executive branch "to impose sweeping tariffs or import restrictions whenever a trade dispute arises". The US-Canada trade war in 5 charts.

Meanwhile, the lawsuit seeks to challenge the White House's reliance on retaliatory tariffs imposed by Canada to justify its own duties under Section 338.

Canada has imposed a series of countermeasures against numerous US tariffs. Last month, Canadian Prime Minister Mark Carney matched the Section 338 US tariffs "dollar for dollar" after Trump imposed them for what he called "unequal treatment" of US cars, dairy and alcohol.

It additionally points out Section 338 requires a 30-day waiting period before levies can be imposed, but the tariff on products including cheese was went on to the list just a week before tariff collection began.

Sara Albrecht, chief executive of the Liberty Justice Center, remarked the case was not concerning Trump himself but regarding the presidency.

"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, " she remarked.

For context, the lawsuit argues that Section 338 of the Tariff Act of 1930 has been superseded by Section 301 of the Trade Act of 1974.

"The case is not an objection to tariffs as such. It asks who has the power to impose them and whether the executive branch followed the law Congress wrote, " the Liberty Justice Center remarked.

In practice, the law group has additionally filed a motion for a preliminary injunction to block their collection.

It is the fourth case brought by the group against Trump's tariffs, including its successful case against the sweeping tariffs brought in under the International Emergency Economic Powers Act (IEEPA) that were struck down in February this year.

Albrecht remarked the group had brought all the cases for the same reason: "the Constitution gives tariff power to Congress. The executive branch cannot keep moving the same policy from one statute to another and pretend the limits disappear".

Taken together, the developments around trump sued over Canadian tariffs in latest legal challenge point to a situation that is still moving, and the coming days should bring more clarity.