A New Jersey food importer has accused President Donald Trump of unlawfully invoking a rarely used 1930s trade law to impose 50 percent tariffs on certain Canadian goods.
Gellert Global Group filed a lawsuit on October 20 in the U.S. Court of International Trade, arguing that Congress later established trade laws that limit the president’s authority to impose tariffs in response to alleged discrimination against U.S. commerce.
The company imports Canadian cheese, including brie, camembert and goat’s milk cheese. Its complaint says it paid at least $520,538 in duties on 22 shipments between September 16 and October 11, and estimates the tariffs could cost it $40 million a year. Those figures are Gellert’s claims in the lawsuit.
Newsweek has reached out to the White House, the Office of the U.S. Trade Representative, Gellert Global Group and its attorneys for comment.
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Why Gellert Says Trump’s Use of the Law Is Unlawful
The lawsuit argues that Section 338 of the Tariff Act of 1930 is no longer a valid basis for the tariffs because Congress later enacted more specific trade laws, including Section 301 of the Trade Act of 1974.
Gellert also alleges that the administration failed to follow Section 338’s requirements. The complaint says the law requires a 30-day wait before collecting duties on newly listed goods. It says products added on September 8 became subject to tariffs on September 15, just seven days later. The court has not ruled on these claims.
Sara Albrecht, chair of the Liberty Justice Center, which represents Gellert, said: “No president should have the power to pull a dormant statute off the shelf and use it to impose sweeping tariffs.” The group also represented challengers to earlier Trump tariffs that the Supreme Court struck down this year.
The White House said it would vigorously defend the tariffs and considers Section 338 an appropriate way to respond to what it calls Canadian discrimination against U.S. dairy, alcohol and auto exports.
What Is Section 338?
Section 338 allows a president to impose duties of up to 50 percent after finding that a foreign country discriminates against U.S. commerce or puts American products at a disadvantage. The complaint says no president had used the provision to impose tariffs in the 96 years before the Trump administration invoked it in 2026.
The legal dispute centers on whether that old authority remains available after Congress passed newer trade laws and whether the administration met the requirements of Section 338 itself.
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Is This the First Lawsuit Over Trump’s Tariffs?
It is the first lawsuit challenging these specific Section 338 tariffs on Canadian goods and it is not the first legal challenge to Trump’s tariff policies overall: earlier cases challenged tariffs imposed under other laws, including the IEEPA tariffs the Supreme Court struck down.
Gellert’s complaint also notes separate cases challenging tariffs imposed under Sections 301 and 122. Those cases raise different legal questions from the challenge to the Canada tariffs.
What Could the Tariffs Mean for Businesses and Shoppers?
Gellert says it is absorbing the tariff costs for now but may have to raise prices if they continue. The company also describes a cross-border supply chain: one of its Ontario brie suppliers uses milk from upstate New York, processes it in Canada and exports the finished cheese to the U.S.
Canada has imposed retaliatory tariffs on U.S. imports, creating additional costs for Canadian businesses and consumers. In September, Canada announced tariffs on about $30 billion in U.S. imports, with rates ranging from 15 to 50 percent. University of Calgary economist Trevor Tombe estimated the measures could increase Canadian consumer prices by about 0.25 percent overall.
He estimated families with children could face costs of roughly $250 a year and households earning less than $30,000 could lose more than 0.5 percent of disposable income. These are estimates of the impact of Canada’s retaliation, not a measure of price rises already experienced by every household.
A Bank of Canada study of an earlier round of Canadian retaliatory tariffs found prices for affected goods rose gradually, peaking at 6 percent after three months, about one-quarter of the 25 percent tariff. The researchers said the price effects reversed quickly after the tariffs were removed.
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Poll Finds Canadians’ Views of the US Have Soured
An Angus Reid Institute survey conducted in July and early August found that 79 percent of Canadians had an unfavorable view of Trump. Views of Americans were more divided: 45 percent of Canadians viewed Americans favorably and 48 percent unfavorably.
The same survey found a majority of Canadians believed their government should approach the U.S. with caution or suspicion. By comparison, 78 percent of Americans said the U.S. should approach Canada as a partner, ally or on friendly terms. The findings offer context on public sentiment during the trade dispute; they do not measure opinion on Gellert’s lawsuit specifically.
What Happens Next
Gellert is seeking to stop the tariffs and recover duties it has paid, with interest. It is also asking to represent a proposed class of importers affected by the Section 338 tariffs. The court has not certified that class or ruled on the allegations.
A ruling for Gellert could limit the administration’s use of Section 338 and potentially open the way for refunds to qualifying importers. The case will turn on whether the law authorizes the tariffs and whether the administration followed the requirements Congress set.
Contact Newsweek editors on this story: John Fitzpatrick and Emma Lee-Sang