Full Breakdown
New Jersey Food Importer Sues Over 50% Tariffs on Canadian Goods
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Core Lawsuit and Immediate Claims
On October 20, 2026, Gellert Global Group, a New Jersey food importer, filed a complaint in the U.S. Court of International Trade seeking a declaration that the Trump administration’s 50 % duties on Canadian products are unlawful, an injunction halting further collection, and refunds with interest for duties already paid. The suit, brought by the nonprofit Liberty Justice Center, alleges the tariffs—imposed under Section 338 of the Tariff Act of 1930—exceed the president’s statutory authority and have caused “direct and irreparable” harm. Gellert estimates the duties could cost the company roughly US $40 million per year and affect US $20 billion worth of Canadian imports.
Background: Section 338 and the Trade Dispute
Section 338, part of the 1930 Smoot–Hawley Tariff Act, was designed to counter foreign discrimination against U.S. commerce but had never been used to impose a duty. President Donald Trump invoked the provision in three proclamations signed July 20 2026, targeting Canadian dairy, alcohol and automobile sectors. The administration argued that Canada’s dairy supply-management system, retaliatory tariffs on U.S. goods, and provincial bans on U.S. liquor constituted discriminatory practices. Critics note that two of the cited measures were counter-responses to earlier U.S. tariffs, and that the dairy quota terms negotiated under USMCA already grant U.S. cheese favorable market access.
Timeline
- July 20 2026 – Trump signs three proclamations invoking Section 338.
- August 22 2026 – Canadian Prime Minister Mark Carney ends pending trade talks, citing “unreasonable last-minute demands.”
- October 20 2026 – Gellert Global Group files the lawsuit in New York’s Court of International Trade.
Data & Statistics
- $20 billion – estimated value of Canadian goods subject to the tariffs (Liberty Justice Center).
- $71 million – Gellert’s 2025 imports of Canadian cheese, previously duty-free under USMCA.
- $1.7 billion – the importer’s annual revenue.
- $120,000 – value of a September 2026 goat-milk cheese shipment on which the company paid $60,000 in tariffs.
- 30-day waiting period – statutory requirement the complaint says was not observed before the tariffs took effect.
Official Statements & Responses
The White House declined to comment. Canadian Federal Minister Dominic LeBlanc said, “we’re going to find a deal with the United States at some point that’s in the interests of the entire Canadian economy.”
Criticism & Opposition
Legal analyst Jeffrey M. Schwab noted that “Congress already gave the executive branch a tool for responding to unfair foreign trade practices: Section 301, which requires an investigation, public comment and other safeguards,” implying that reliance on Section 338 bypasses required procedural protections.
Conflicting Reports & Gaps
The lawsuit characterizes the tariffs as exceeding presidential authority, while the administration maintains they are a lawful response to Canadian discrimination. No court ruling has yet addressed whether the 30-day waiting period was satisfied, leaving a key procedural question unresolved.
Why It Matters
The case tests the limits of executive tariff power under a nearly century-old statute and could set precedent for future trade disputes. A ruling against the administration would reinforce congressional primacy in tariff matters, potentially reshaping U.S. trade strategy and affecting the $20 billion Canada-U.S. trade flow that underpins supply chains in dairy, alcohol, automotive and other sectors.