A legal challenge has been initiated against the tariffs imposed by U.S. President Donald Trump on Canada. The lawsuit was filed at the United States Court of International Trade by the non-profit organization Liberty Justice Center, representing U.S. food importer Gellert Global Group. The lawsuit argues that Trump’s utilization of a trade statute from the 1930s, known as Section 338, exceeds his presidential authority.
According to Liberty Justice Center CEO Sara Albrecht, the decision to invoke Section 338 for imposing a 50% tariff on various Canadian products, following failed trade negotiations, is unprecedented and inappropriate. The White House defended its actions by citing that Section 338 allows the president to impose tariffs when a country hampers U.S. exporters compared to other nations, even though this provision has not been previously utilized for such purposes.
The lawsuit contends that the Canadian policies cited by U.S. officials as justification for the tariffs do not warrant the extensive trade restrictions imposed by the Trump administration. Additionally, it highlights that some of the measures implemented by Canada, like auto quotas and liquor bans, were responses to Trump’s own tariff actions. The lawsuit also emphasizes that Canada’s dairy supply management aligns with policies established under the Canada-U.S.-Mexico Agreement on trade.
The legal challenge underscores the detrimental impact of the tariffs on American businesses, including Gellert Global Group, which faces disruptions in its supply chain and increased costs due to the ongoing trade war. The company elaborated on how the integrated North American market is being disrupted by the tariff dispute, affecting both American farmers and businesses involved in cross-border trade.
The lawsuit raises concerns beyond the Canada-U.S. trade relationship, warning that unchecked use of Section 338 could empower any future president to unilaterally impose tariffs and trade restrictions without significant congressional oversight. The legal action seeks to declare the tariffs unlawful and requests a refund for affected parties.
Notably, the Liberty Justice Center has previously challenged Trump’s use of the International Economic Emergency Powers Act of 1977 in imposing tariffs on Canada, Mexico, and China, resulting in a ruling against the administration’s actions.