Trump Sued Over Proposed 50% Tariffs on Canadian Imports

Trump Faces Suit Over 50% Canada Tariffs

A U.S. food importer is challenging the Trump administration’s decision to impose 50% tariffs on a broad range of Canadian products, arguing that the president exceeded his authority by using a rarely invoked provision of federal law.

The lawsuit was filed Tuesday in the U.S. Court of International Trade in New York. The case, Gellert Global Group Corp. v. Trump, seeks to block the tariffs through a preliminary injunction while the court considers the company’s broader legal claims.

Gellert Global Group imports Canadian products, including cheese, into the United States. The company also ships American dairy products to Canada and says it faces trade costs on both sides of the border as the dispute continues.

The case centers on tariffs imposed under Section 338 of the Smoot-Hawley Tariff Act of 1930. The administration used the Depression-era provision to apply 50% duties to a range of Canadian goods, including dairy products, furniture, clothing, wine and other alcoholic beverages. Other products identified in coverage of the tariffs include hockey sticks and cement.

The measures were announced during the summer and became effective Sept. 9, according to the lawsuit-related accounts. They came on top of existing U.S. tariffs affecting Canadian aluminum, lumber, vehicles and steel.

The administration later expanded the list of covered products in response to Canadian retaliatory tariffs. It also moved to prohibit certain Canadian alcoholic products from entering the U.S. market, including whiskey, malt beer, sparkling wine, vermouth, cider and other spirits.

Gellert argues that Section 338 does not give the president authority to impose the tariffs in these circumstances. The company contends that the law does not apply to the Canadian policies the administration has identified as discriminatory.

According to the lawsuit’s arguments, some of those Canadian measures were adopted in response to the U.S. tariffs themselves. Another involves Canadian dairy policy governed by the United States-Mexico-Canada Agreement, or USMCA. The importer also questions why Canadian cheese should be subject to tariffs tied to disputes involving products such as alcohol and automobiles.

The lawsuit is part of a wider series of legal challenges to the administration’s use of presidential authority to impose tariffs. Those cases broadly argue that the power to establish taxes and duties belongs to Congress unless lawmakers have clearly delegated it to the executive branch.

For trucking companies, the dispute adds another layer of uncertainty to cross-border freight between the United States and Canada. Tariffs are paid by importers, but changes in duty rates and product eligibility can affect shipment costs, customs paperwork, routing decisions and delivery timing.

Food and beverage freight may be especially sensitive to the changes because many products move through the border in temperature-controlled or time-sensitive shipments. A higher duty can alter the landed cost of a load before it reaches a warehouse, distribution center or retail customer. Importers and carriers must also track changing product lists and any restrictions affecting whether a shipment can enter the country.

The tariffs were imposed during an ongoing trade dispute between the two countries. The United States and Canada had held negotiations aimed at reducing tensions, and the two sides appeared to have reached the broad terms of a preliminary agreement before those discussions broke down.

The administration has said the tariffs respond to what it considers discriminatory Canadian treatment of American-made vehicles, alcohol and dairy products. Canada has imposed retaliatory measures, prompting further changes to the U.S. tariff program.

The immediate issue before the trade court is whether to temporarily block the 50% duties while the case proceeds. The court has not issued a ruling on the importer’s claims in the information provided. Until a court order changes the policy, the tariffs and related restrictions remain part of the rules governing covered Canadian imports.