Muhammad Amanullah
Date: October 21, 2026
The True Post (Web News) —A US food-importing company has challenged President Donald Trump’s 50 per cent tariffs on Canadian products in court, arguing that his administration exceeded its presidential authority by invoking a largely unused trade law dating back to 1930. The company says the tariffs are also harming American businesses by increasing costs and disrupting cross-border supply chains.
On Tuesday, the nonprofit Liberty Justice Center filed a lawsuit on behalf of New Jersey-based food importer Gellert Global Group in the US Court of International Trade. The lawsuit asks the court to declare the tariffs unlawful and order the government to refund duties the company has paid.
Liberty Justice Center Chief Executive Officer Sarah Albrecht argued that a president should not be able to revive an outdated legal provision to impose sweeping tariffs or import restrictions when Congress has established legal limits on such actions.
The case could have significant implications for US trade policy, presidential authority and the future of cross-border commerce between the United States and Canada.
Trump Administration Imposes 50% Tariffs on Canadian Products
According to the lawsuit, the Trump administration invoked Section 338 of the Tariff Act of 1930 in August after trade negotiations between the United States and Canada broke down, imposing tariffs of up to 50 per cent on a range of Canadian products.
The following month, the administration reportedly introduced additional import restrictions under the same provision covering certain other Canadian goods, including motorcycles and some alcoholic beverages and dairy products.
The White House maintains that Section 338 authorises the president to impose tariffs when a foreign country discriminates against American exporters compared with exporters from other countries. However, the provision has never previously been used to impose tariffs in this manner, according to the report.
US officials have cited several Canadian trade policies as justification for the measures, including provincial restrictions on the sale of American alcoholic beverages, Canada’s dairy supply-management system and quotas affecting imports of certain American vehicles.
The legality of using the decades-old provision to impose broad tariffs is now at the centre of the dispute.
Importer Argues Canadian Policies Do Not Justify Sweeping Tariffs
Gellert Global Group argues that the Canadian policies cited by the Trump administration do not justify the broad tariffs imposed on Canadian goods.
In its court filing, the company reportedly contends that Canadian restrictions on certain American vehicles and alcoholic beverages were responses to tariffs previously imposed by the Trump administration.
The company also defended Canada’s dairy system, arguing that it operates within the framework of the Canada-United States-Mexico Agreement (CUSMA), the North American trade agreement negotiated during Trump’s first presidential term.
Thomas Gellert, the company’s co-chief executive officer, said the business had spent generations building trusted relationships with suppliers, customers and commercial partners across the food industry.
He warned that tariffs could abruptly disrupt those relationships, create additional costs and introduce uncertainty throughout the supply chain.
Company Faces Tariffs on Both Sides of the Border
Gellert Global Group says it is being affected by tariffs imposed by both countries.
The company pays a 50 per cent US tariff on cheese imported from Canada. At the same time, its Canadian subsidiary faces Canadian retaliatory tariffs on American cheese sold in Canada.
The situation illustrates how trade restrictions can affect businesses operating across both markets, even when their products and supply chains depend on commercial relationships between American and Canadian producers.
The company argues that these overlapping tariffs increase costs and complicate ordinary business operations, with consequences for suppliers, distributors and consumers.
Cross-Border Dairy Supply Chain Highlights Economic Interdependence
The lawsuit also points to the close economic relationship between American and Canadian businesses through an example involving the cheese industry.
According to the company, one of its Canadian cheese suppliers obtains milk from dairy farms in upstate New York. The milk is then processed in Canada to produce Brie cheese, which is subsequently shipped back to the United States.
The cross-border production process involves farmers and businesses in both countries, demonstrating how tariffs can affect an integrated supply chain rather than a single national industry.
The company argues that such arrangements make the economic consequences of trade restrictions more complicated, as duties imposed on imports can affect producers on both sides of the border.
For businesses operating across North America, the dispute highlights the uncertainty created when tariffs disrupt established sourcing, processing and distribution arrangements.
Trump Administration Vows to Defend Tariffs
A Trump administration official, speaking on condition of anonymity, said the government would vigorously defend the president’s actions in court.
According to the official, the lawsuit would not weaken the administration’s commitment to securing fair trading opportunities for American workers, farmers and businesses.
US Ambassador to Canada Pete Hoekstra also addressed the trade dispute on Tuesday during a conference in Gatineau, Quebec.
Hoekstra said the Trump administration did not consider the United States and Canada to be engaged in a trade war. He added that the two countries were negotiating over certain tariffs and that Washington did not view the bilateral relationship as broken, although he acknowledged that Canadians might see the situation differently.
His comments reflect the administration’s position that negotiations remain possible despite the continuing trade tensions.
Legal Challenge Targets the Use of a 1930 Trade Law
The Liberty Justice Center argues that Section 338 of the Tariff Act of 1930 has become obsolete as a practical trade-enforcement mechanism and that later legislation, including Section 301 of the Trade Act of 1974, provides a more established framework for responding to unfair foreign trade practices.
The lawsuit also challenges whether the administration met the legal requirements for imposing tariffs under Section 338, including an alleged failure to observe a required 30-day waiting period.
Jeffrey M. Schwab, a senior counsel at the Liberty Justice Center, argued that Congress had already established a process under Section 301 for addressing unfair trade practices.
That process includes investigations, opportunities for public comment and other procedural safeguards, according to the organisation.
Schwab maintained that the administration should not be allowed to bypass those protections by relying on a 1930 provision that had never previously been used by a president to impose tariffs.
The court will now be asked to consider whether the administration’s interpretation of the law is consistent with the statutory limits on presidential trade authority.
Previous Court Challenges Have Also Targeted Trump’s Tariffs
The Liberty Justice Center has previously been involved in legal challenges to tariffs imposed by the Trump administration under the International Emergency Economic Powers Act of 1977, commonly known as IEEPA.
Those cases included tariffs described as part of Trump’s “Liberation Day” trade measures and duties linked to fentanyl-related concerns involving imports from Canada, Mexico and China.
The supplied report states that the US Supreme Court ruled in February 2026 that Trump could not use IEEPA to impose those tariffs because the US Constitution assigns Congress the power to levy taxes and tariffs.
Following that ruling, the president introduced replacement tariffs under a temporary legal mechanism, which was also challenged in court. The administration subsequently imposed tariffs ranging from 10 to 12.5 per cent on goods from most countries, citing concerns related to forced labour in supply chains, according to the report.
A coalition of US states is also challenging the administration’s use of Section 301 of the Trade Act of 1974 in connection with tariffs related to forced-labour concerns.
These legal disputes have placed increasing attention on the limits of presidential authority over international trade and the role of Congress in determining tariff policy.
Court Decision Could Shape Future US-Canada Trade Relations
In its latest lawsuit, Gellert Global Group is asking the US Court of International Trade to declare the tariffs imposed under Section 338 unlawful, halt their collection and order the government to refund duties paid by the company.
The case could become an important test of how far a US president can go in using existing trade legislation to impose tariffs on foreign goods.
A ruling against the administration could undermine its reliance on Section 338 and potentially affect the future application of tariffs on Canadian products. A decision in the government’s favour, however, could strengthen its position in defending the use of the provision.
Beyond the immediate legal question, the dispute highlights the economic consequences of trade barriers for businesses operating across the US-Canada border.
As the case proceeds, importers, exporters, farmers and manufacturers will be watching closely for a decision that could influence trade costs, supply-chain stability and the future direction of economic relations between the two neighbouring countries.
