The Trump administration is facing a lawsuit over its tariffs on Canadian goods, filed by the same group that previously succeeded in getting the Supreme Court to overturn part of the president’s tariffs last year.
The Liberty Justice Center has initiated the suit in the US Court of International Trade on behalf of Gellert Global Group, a New Jersey-based importer. They claim that the tariffs will result in a staggering $40 million annual cost for their cheese imports.
This lawsuit highlights a broader range of Canadian products, which includes not just cheese, but also items like alcohol, hockey sticks, and cement, all subjected to a hefty 50% tariff since August amid a tense trade dispute with Canada. This additional tariff is on top of existing tariffs on aluminum, lumber, vehicles, and steel.
The 50% duties took effect on September 9, coinciding with a ban on several Canadian alcohols, such as whiskey, malt beer, and various other spirits.
A statement from the White House emphasized that Congress has given the president the power, under Section 338, to mitigate disadvantages to US commerce resulting from foreign discrimination, which includes continued discriminatory practices by Canada against US dairy, alcohol, and automotive exports.
Despite the lawsuit, the administration expressed its commitment to ensuring fairness for American workers, farmers, and businesses, stating that it would robustly defend the president’s actions in court.
This new legal challenge scrutinizes Section 338 of the Tariff Act of 1930, which is described as a “dormant statute” that hasn’t been utilized until now, according to Sara Albrecht, the center’s CEO.
The group is aiming for a preliminary injunction to lift the 50% tariffs, positioning their argument that the president overstepped his authority by implementing these tariffs without Congressional approval.
Gellert faces significant tax burdens on both sides—importing Canadian cheeses and exporting US dairy products to Canada.
Thomas Gellert, co-CEO of Gellert Global Group, stated, “The company has invested generations in building reliable relationships within the food industry.” He stressed that these tariffs disrupt those relationships suddenly and introduce costs and uncertainties that affect the entire supply chain.
For instance, one supplier purchases milk from upstate New York farmers, processes it into brie in Canada, and then ships the final product back to the US.
Gellert is a $1.7 billion firm that brought in $71 million worth of diverse Canadian cheeses, including goat cheese, brie, mascarpone, and camembert last year.
The new duties followed Trump’s assertions that Canada was discriminating against US businesses. Although the tariffs were briefly suspended during negotiations, the talks deteriorated instead of yielding a cooperative agreement, resulting in Canada retaliating with their own tariffs on US goods.
Canadian Prime Minister Mark Carney pointed to “last-minute changes in US proposed terms” as unfair and economically unviable, questioning the reliability of any future agreements as contributing factors to the negotiation failure.
The Liberty Justice Center initially won a tariff case against the administration in February when the Supreme Court invalidated the tariffs imposed under the International Emergency Economic Powers Act, leading the government to refund those tariff payments along with interest.
