A legal action disputing U.S. President Donald Trump’s tariffs aimed at Canada has been initiated in the United States Court of International Trade.
The lawsuit, lodged on Tuesday by the non-profit organization Liberty Justice Center on behalf of U.S. food importer Gellert Global Group, contends that Trump’s application of a trade statute from the Great Depression era exceeds his authority as president.
“Using Section 338, which I believe is a dormant statute from 1930 that has never previously been utilized, signifies to us that this is incorrect and we need to take action,” stated Liberty Justice Center CEO Sara Albrecht during an interview with CBC’s Katie Simpson from Chicago.
Trump invoked Section 338 to impose a 50 percent tax on various Canadian products following the collapse of trade negotiations in August.
In the following month, the same statute was employed to prohibit the import of additional Canadian items, including motorcycles and certain alcoholic and dairy products.
Lawsuit claims Canadian regulations do not warrant tariffs
The White House has asserted that Section 338 grants the president the authority to impose tariffs when another country disadvantages U.S. exporters compared to those from other nations — although this law has never been applied for that reason.
U.S. officials have indicated that the latest tariffs are a reaction to provincial restrictions on U.S. liquor, Canada’s managed dairy system, and quotas on specific U.S. vehicles.
The lawsuit filed on Tuesday argues that the Canadian regulations do not justify the extensive tariffs enforced by the Trump administration.
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It highlights that two of the actions — vehicle quotas and liquor bans — were actually responses to Trump’s own tariff initiatives.
The lawsuit further states that Canada’s dairy management policies are part of agreements made under the Canada-U.S.-Mexico Agreement (CUSMA), which was negotiated during Trump’s first term.
“This has tangible consequences not only for importers but also for consumers in both nations,” Albrecht mentioned. “Moreover, it carries broader implications due to the nature of the two countries and our historical ties.”
She acknowledged that tariffs are a hallmark of Trump’s approach, but asserts that the execution in this instance is misguided.
“He has consistently favored tariffs, in my view, mainly because they generate revenue … and I can respect that,” Albrecht noted. “However, in this case, it is incorrect and infringes upon our Constitution.”
Industry Minister Mélanie Joly says Ottawa took ‘note’ of Stelco’s U.S. owner’s earnings call, which she said confirmed Cleveland-Cliffs’ support for U.S. tariffs against Canadian steel workers. Joly said her department is working closely with the union on a potential legal case and that she’ll have more to say ‘the coming days.’
A representative from the Trump administration, speaking on background, stated that the president’s measures will be robustly defended in court. The official conveyed that Tuesday’s lawsuit will not sway the president’s dedication to ensuring fairness for American workers, farmers, and businesses.
Wider implications beyond Canada
However, the actions of the Trump administration are already causing repercussions for American companies.
Thomas Gellert, co-CEO of Gellert Global Group, remarked that the company has “spent generations cultivating trusted partnerships with suppliers, customers, and collaborators throughout the food industry.”
“These tariffs disrupt those relationships overnight and introduce costs and uncertainties that reverberate throughout the entire supply chain,” Gellert stated in a press release.
The trade conflict is adversely affecting the company on multiple fronts. It faces a 50 percent tariff on Canadian cheese imports while also being hit by retaliatory tariffs from Ottawa on American cheeses sold by its Canadian division in Canada.
The company illustrates the impact by referencing one of its Canadian cheese suppliers, highlighting how the interconnected North American market is being affected by the tariff conflict. The supplier sources milk from dairy farmers in Upstate New York, processes it into brie in Canada, and then exports it back to the U.S.
“The tariffs impact American farmers and businesses on both sides of that transaction,” the press release indicated.
The situation raises concerns that extend beyond Canada, as per the press release. If these tariffs remain unchecked, any future president could exploit Section 338 to enact tariffs and trade restrictions without effective congressional oversight.
The lawsuit seeks a court ruling to deem the tariffs unlawful and to mandate a refund.
Previously, the Liberty Justice Center participated in the legal challenge against Trump’s invocation of the International Economic Emergency Powers Act of 1977 concerning the so-called “Liberation Day” and tariffs on fentanyl related to Canada, Mexico, and China.
In February, the U.S. Supreme Court ruled that it was unlawful for Trump to employ the statute, known as IEEPA, since the U.S. Constitution distinctly assigns Congress the authority over taxes and tariffs.
