Why is a new lawsuit being filed against the Canadian tariffs?
The Liberty Justice Center has initiated legal proceedings to contest the White House's imposition of 50% tariffs on roughly $20bn worth of Canadian imports. This new challenge follows the group's previous legal victory regarding "liberation day" import taxes. The current suit focuses on the administration's use of Section 338 of the 1930 Tariff Act to target a wide array of Canadian products, ranging from dairy and wine to hockey sticks.
The lawsuit was filed on behalf of Gellert Global Group, a New Jersey-based, third-generation family business. The firm is currently struggling with the 50% levy applied to cheese imported from Canada. Beyond the direct cost of the US tariffs, the company is also facing retaliatory duties from Canada on American-made cheese exports. This dual pressure creates a significant financial burden for importers operating across the North American border.
The core of the legal argument rests on whether the executive branch has the authority to implement such broad restrictions. The Liberty Justice Center contends that while Section 338 was designed to protect American industries from foreign discrimination, it does not grant the President the power to launch sweeping import restrictions simply because a trade dispute arises. The plaintiffs are requesting that the US Court of International Trade declare the levies unlawful and mandate refunds, including interest, to the affected businesses.
How does Section 338 of the Tariff Act of 1930 factor into the dispute?
The legal dispute centers on the interpretation of Section 338 of the 1930 Tariff Act, a nearly century-old statute. The Trump administration has utilized this section to justify its recent levies on Canadian goods, citing "unequal treatment" regarding US automobiles, dairy, and alcohol. However, the Liberty Justice Center argues that the administration's reliance on this specific statute is legally flawed for several reasons.
The conflict between Section 338 and the Trade Act of 1974
A primary contention in the lawsuit is that Section 338 has been superseded by Section 301 of the Trade Act of 1974. The plaintiffs argue that the legal framework governing trade disputes has evolved, and the White House cannot simply revert to older statutes to bypass modern legislative limits. If the court finds that Section 338 is no longer the appropriate mechanism for these actions, the current tariffs may be deemed unauthorized.
Furthermore, the lawsuit challenges the White House's logic regarding retaliatory measures. The administration has defended its duties by pointing to the countermeasures imposed by Canada. Canadian Prime Minister Mark Carney recently matched the US Section 338 tariffs "dollar for dollar." The plaintiffs argue that the existence of Canadian retaliation does not provide the US executive branch with a legal mandate to bypass the specific requirements of the Tariff Act.
There is also a procedural challenge regarding the timing of the levies. According to the lawsuit, Section 338 requires a mandatory 30-day waiting period before new levies can be implemented. The plaintiffs allege that the administration bypassed this requirement by adding products such as cheese to the tariff list only one week before collection began. This alleged breach of procedural law serves as a secondary pillar for the legal challenge.
What is the economic impact on American businesses and supply chains?
The imposition of 50% tariffs has caused immediate disruption to US importers and the broader food supply chain. For businesses like Gellert Global Group, the tariffs do not merely represent a tax increase; they threaten the fundamental structure of their operations. The suddenness of the levies has introduced levels of cost and uncertainty that ripple through various sectors of the economy.
Thomas Gellert, co-chief executive of Gellert Global Group, highlighted the damage to long-standing commercial ties. He stated that the tariffs disrupt relationships built over generations and create instability throughout the supply chain. When importers face a sudden 50% increase in costs, those expenses are often passed down to consumers or result in reduced margins that can threaten the solvency of mid-sized family firms.
The impact is not limited to a single product category. Because the tariffs cover a diverse range of goods—including wine, dairy, and sporting equipment—the economic friction is felt across multiple industries. This creates a volatile environment for businesses that rely on predictable cross-border trade to manage inventory and pricing strategies.
What are the broader constitutional implications for presidential power?
The Liberty Justice Center maintains that this case is less about the specific tariffs and more about the constitutional limits of the presidency. The central argument is that the Constitution grants the power to impose tariffs to Congress, not the executive branch. The lawsuit seeks to prevent a precedent where a President can "pull a dormant statute off the shelf" to implement massive trade shifts without legislative approval.
Sara Albrecht, chief executive of the Liberty Justice Center, emphasized that the executive branch should not be allowed to move policies between different statutes to evade the limits set by Congress. This follows a pattern of legal challenges; the group previously won a case against tariffs imposed under the International Emergency Economic Powers Act (IEEPA), which were struck down in February 2026.
The outcome of this case could define the boundaries of executive authority in international trade for years to come. If the court rules in favor of the administration, it may provide a roadmap for future presidents to use older statutes to bypass Congressional oversight. Conversely, a ruling for the plaintiffs would reinforce the principle that trade policy must adhere to the specific procedural and substantive limits established by the legislative branch.
Frequently asked questions
What is the primary goal of the Liberty Justice Center's lawsuit?
The lawsuit aims to have the US Court of International Trade declare the 50% Canadian tariffs unlawful. The group is seeking to protect US businesses from what they describe as an overreach of executive power and is requesting full refunds with interest for all affected importers.
Which specific law is being challenged in this case?
The challenge focuses on the administration's use of Section 338 of the 1930 Tariff Act. The plaintiffs argue that this statute is being used improperly to impose sweeping restrictions and that it may have been superseded by the Trade Act of 1974.
How are Canadian goods being affected by these tariffs?
A wide variety of Canadian products are subject to the 50% levy, including dairy products like cheese, wine, and even hockey sticks. These tariffs were implemented following the breakdown of trade discussions between the United States and Canada in August 2026.
How has Canada responded to the US tariffs?
Canada has implemented retaliatory tariffs against various US goods. Prime Minister Mark Carney has matched the US Section 338 tariffs "dollar for dollar" in response to what the Canadian government views as unequal treatment of its exports.
Who is Gellert Global Group?
Gellert Global Group is a third-generation, family-owned food business based in New Jersey. The company is one of the primary plaintiffs in this lawsuit, as it is currently facing significant costs due to the 50% tariffs on Canadian cheese imports.
Key takeaways
- The Liberty Justice Center is suing over 50% tariffs on $20bn of Canadian goods.
- The lawsuit claims the White House exceeded its authority under Section 338 of the 1930 Tariff Act.
- Affected businesses, such as Gellert Global Group, are seeking refunds with interest.
- The case examines whether the President can bypass Congressional tariff powers using older statutes.
- Canada has responded with "dollar for dollar" retaliatory tariffs on US products.
Conclusion
The legal battle over the Trump administration's Canadian tariffs represents a critical intersection of trade policy and constitutional law. By challenging the use of Section 338, the Liberty Justice Center is attempting to reassert Congressional authority over the nation's trade landscape. As businesses like Gellert Global Group navigate the immediate economic fallout of these 50% levies, the US Court of International Trade faces a decision that will ultimately determine the extent of executive power in managing international trade disputes and the legality of using dormant statutes to reshape economic relations.
