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50% Tariffs on Canadian Goods Face Lawsuit Over Section 338
Why is Trump being sued over Canada tariffs?
Gellert Global Group, a New Jersey food importer, sued the Trump administration on Tuesday, arguing Section 338 of the 1930 Tariff Act cannot justify 50% tariffs on about $20 billion of Canadian goods.
Key numbers
| Tariff rate | 50%on ~$20B of Canadian goods |
|---|---|
| Duties paid by Gellert | $520,000+Sept 16 to Oct 11 |
| Gellert cheese imports | $71M a year$40M yearly damage claimed (per [6]) |
| Section 338 invoked | Jul 20, 2026AP says August; USTR statement dated Jul 20 |
| Canada's counter-tariffs | ~$20BGlobe and Mail reports $27B |
What happened
Gellert Global Group, a New Jersey food importer, sued the Trump administration on Tuesday, arguing Section 338 of the 1930 Tariff Act cannot justify 50% tariffs on about $20 billion of Canadian goods. No president had used the 1930 law for tariffs before this year. Mr. Trump invoked it on July 20 against Canadian cars, alcohol and dairy, saying Canada treats U.S. exporters unfairly. The importer says a newer law, Section 301, requires investigations first. It wants the tariffs ruled illegal and its duties refunded with interest. Gellert paid over $520,000 in duties between September 16 and October 11.
Why it matters
The Gellert Global Group lawsuit is the first court test of Section 338, a law no president had used for tariffs before. If the court rules against the administration, the 50% tariffs on about $20 billion of Canadian goods could be struck down and importers could win refunds. If the tariffs stand, the 50% duties stay in place. Prices of goods like cheese, wine and furniture could move either way.
Who this affects
- MarketmixedMedium impact
- Importers and consumers face uncertainty over Canadian goods prices.
- CompanymixedMedium impact
- Gellert has paid over $520,000 in duties; refunds possible.
- CompetitorsneutralLow impact
- Other importers could join the proposed class and seek refunds.
- IndustrybearishMedium impact
- Canadian dairy, alcohol and auto exporters stay under 50% duties.
United States vs Canada
| United States | 50% | ~$20B | ~Aug 2026 |
|---|---|---|---|
| Canada (retaliation) | Dollar-for-dollar | ~$20B–$27B | Sept 8, 2026 |
As of 2026-10-20
How we got here
Trump takes three Section 338 actions: 50% tariffs on nearly $20B of Canadian imports.
Canada's retaliatory tariffs begin; U.S. adds Canadian cheeses to the tariff list.
Gellert Global Group sues in the U.S. Court of International Trade in New York.
What to watch
- Court of International Trade response, including any order halting collection of the duties.Q4 2026
- Rulings expected in related Section 301 tariff cases that could shape this challenge.2026-11
- Whether the court certifies the proposed class of importers seeking refunds.Q4 2026
Educational content only. Not investment advice.
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