Trump Faces New Legal Challenge Over 50% Tariffs on Canadian Imports

Yesterday 08:30

A new legal challenge to President Donald Trump’s trade policy is testing the limits of executive authority over import duties, with a New Jersey-based food importer seeking to overturn tariffs of up to 50% imposed on a range of Canadian products.

Filed on Tuesday at the U.S. Court of International Trade, the complaint by Gellert Global Group argues that the Trump administration cannot lawfully rely on a nearly century-old provision to impose the contested duties. The company says its imported cheeses are among the goods affected and is asking the court to invalidate the tariffs, halt their enforcement and require the government to reimburse duties already collected, including interest.

The lawsuit adds another front to the legal battles surrounding Trump’s aggressive use of tariffs as an instrument of economic and trade policy.

A dormant law at the centre of the dispute

The administration invoked Section 338 of the Tariff Act of 1930 in July to impose 50% tariffs on selected Canadian goods, including hockey sticks, wine, honey and wigs. The measure was justified by allegations that Canada had engaged in discriminatory trade practices against the United States.

The provision dates back to the era of the Great Depression and had never previously been used to impose tariffs, according to the information cited in the complaint.

Gellert Global’s legal filing challenges the continued validity of the provision as a basis for the administration’s action. The company argues that subsequent legislation has effectively displaced the statute’s authority, making its use in the current circumstances unlawful.

The dispute therefore centres not only on the financial consequences for importers but also on the extent to which a president can revive an old legal mechanism to introduce significant trade restrictions.

Legal team renews challenge to Trump’s tariff strategy

Gellert Global is represented by the Liberty Justice Center, a legal organisation that has already secured a major victory against another component of Trump’s tariff programme.

The group successfully challenged the administration’s so-called reciprocal tariffs, which were struck down by the U.S. Supreme Court in February. The federal government is now working to refund an estimated $166 billion collected from importers under those duties.

The latest case forms part of a broader legal effort by the organisation to contest what it considers an excessive interpretation of presidential powers under existing trade laws. The Liberty Justice Center is also pursuing two other lawsuits concerning the administration’s use of statutory authority to impose extensive tariffs.

Its chief executive, Sara Albrecht, said the new action was intended to address the institutional limits on presidential power rather than focus on Trump personally. She argued that dormant legislation should not provide a route to broad tariffs or import bans beyond the restrictions established by Congress.

Financial exposure and trade policy in focus

For importers, the outcome could determine whether duties paid on affected Canadian products can be recovered and whether the tariffs remain enforceable while the dispute proceeds.

The request for refunds, together with interest, makes the financial stakes significant for businesses whose supply chains depend on cross-border trade. However, the lawsuit does not establish that the tariffs are unlawful; that question will be for the court to decide.

The case also raises wider questions about the legal foundations of U.S. trade measures and the balance of authority between the executive branch and Congress. A ruling against the administration could constrain its reliance on Section 338, although the precise consequences would depend on the court’s decision.

The White House had not immediately responded to CNBC’s request for comment on the lawsuit.

For now, the challenge places another part of Trump’s tariff agenda under judicial scrutiny, as businesses seek greater certainty over the rules governing imports from Canada.