Trump Faces New Lawsuit Over Canadian Tariffs

By Rachel Clun, Business reporter, New York
Published 20 October 2026

President Donald Trump is confronting another legal battle over his administration’s tariff policy. The Liberty Justice Center, which previously won a case challenging his “liberation day” import taxes, has filed a fresh suit contesting the recent 50 percent levy on roughly $20 billion of Canadian products. The tariffs were imposed after trade negotiations between the United States and Canada collapsed in August.

The lawsuit, brought on behalf of New Jersey‑based food importer Gellert Global Group, asks the U.S. Court of International Trade to declare the duties unlawful and to order refunds with interest for affected importers. It contends that the White House exceeded its statutory authority and caused “immediate harm to American businesses.”

Gellert Global Group, a third‑generation family firm, now pays a 50 percent tariff on Canadian cheese it exports. The company is also confronting retaliatory Canadian duties on the same product sold north of the border. Co‑chief executive Thomas Gellert said the firm has built supplier and customer relationships over generations. “These tariffs disrupt those relationships overnight and create costs and uncertainty that ripple through the entire supply chain,” he said on Tuesday.

The Liberty Justice Center argues that the administration’s reliance on Section 338 of the 1930 Tariff Act to target a range of Canadian goods—from wine and dairy to hockey sticks—exceeds the law’s intent. That provision was designed to protect U.S. businesses from foreign discrimination, not to allow the executive branch to impose broad tariffs whenever a trade dispute arises.

The suit also challenges the White House’s justification for the tariffs, which cites retaliatory measures taken by Canada. In August, Canadian Prime Minister Mark Carney matched the Section 338 duties “dollar for dollar” after Trump claimed the United States faced “unequal treatment” in the automotive, dairy and alcohol sectors. The complaint notes that Section 338 requires a 30‑day waiting period before duties can be enacted, yet the tariff on cheese and other items was added to the list only a week before collection began.

Sara Albrecht, chief executive of the Liberty Justice Center, said the case concerns presidential power rather than Trump personally. “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,” she said.

The filing argues that Section 338 has been superseded by Section 301 of the Trade Act of 1974, and even if Section 338 remains valid, the administration has not provided a legal basis for the sweeping duties against Canada. “The case is not an objection to tariffs as such. It asks who has the power to impose them and whether the executive branch followed the law Congress wrote,” the Liberty Justice Center explained. A motion for a preliminary injunction to halt collection has also been submitted.

This is the fourth action the group has taken against Trump‑era tariffs, including a successful challenge earlier this year that struck down sweeping duties imposed under the International Emergency Economic Powers Act. Albrecht said all the cases stem from the same principle: “The Constitution gives tariff power to Congress. The executive branch cannot keep moving the same policy from one statute to another and pretend the limits disappear.”