President Trump's latest tariffs on Canada are now facing a courtroom test. New Jersey-based importer Gellert Global Group sued Tuesday to overturn the 50% duties Trump imposed in July on Canadian goods including cheese, hockey sticks, wine, honey, and wigs, arguing the White House is misusing a 1930 law that has never before been used to levy tariffs, CNBC reports. Filed in the US Court of International Trade, the suit says Section 338 is an outdated "relic of the retaliation-based tariff policy" that has been effectively superseded by modern trade laws—and that even if valid, Trump didn't meet its requirements.
Gellert, represented by the Liberty Justice Center, wants the tariffs ruled illegal, halted, and refunded with interest. The group, which previously helped topple Trump's "reciprocal" tariffs at the Supreme Court, argues that 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." The Canadian actions cited in Trump's proclamation, including responses to Trump's earlier tariffs, "do not discriminate against the United States," the lawsuit argues.
In the lawsuit, Gellert says it is now paying a 50% duty on the Canadian cheese it imports, costing it an estimated $40 million a year. The company says that for now, it is absorbing the costs instead of passing them on to customers, but that strategy is "not sustainable long term." The company says one of its suppliers gets milk from farmers in upstate New York, processes it into brie in Canada, then sends the cheese to the US, meaning "tariffs hit American farmers and businesses on both sides of that transaction," per the CBC. The White House said the administration would vigorously defend the tariffs, the AP reports.
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