Lawsuit challenging Trump's tariffs against Canada filed in U.S. Court of International Trade

A lawsuit challenging U.S. President Donald Trump's tariffs targeting Canada has been filed in the United States Court of International Trade.

Case was filed by the Liberty Justice Center on behalf of a U.S. business

Listen to this article

Estimated 5 minutes

The audio version of this article is generated by AI-based technology. Mispronunciations can occur. We are working with our partners to continually review and improve the results.

A lawsuit challenging U.S. President Donald Trump's tariffs targeting Canada has been filed in the United States Court of International Trade.

The lawsuit, filed Tuesday by the non-profit Liberty Justice Center on behalf of U.S. food importer Gellert Global Group, argues Trump's use of a Depression-era trade statute exceeds his power as president.

"Using the Section 338, which is, in my opinion, a dormant statute from 1930 that has never been used before, just said to us that this is wrong and we should do something about it," Liberty Justice Center CEO Sara Albrecht said in an interview from Chicago with CBC's Katie Simpson.

Trump used Section 338 to slap an array of Canadian goods with a 50 per cent levy after trade talks broke down in August.

The same statute was used the following month to ban the import of other Canadian goods, including motorcycles and some alcohol and dairy products.

Lawsuit argues Canadian policies don't justify tariffs

The White House has said Section 338 empowers the president to impose tariffs when a country puts U.S. exporters at a disadvantage relative to exporters in other countries — even though the law has never been used for that purpose.

U.S. officials have said the latest duties are a response to provincial bans on U.S. liquor, Canada's supply managed dairy system and quotas on certain U.S. vehicles.

Tuesday's lawsuit said the Canadian policies don't justify the sweeping tariffs imposed by the Trump administration.

• Trump says 'very bad' Canada is being 'taught a little lesson' as trade action escalates

• Fact-checking the White House statement of facts about Canada

It notes two of the measures — auto quotas and liquor bans — were actually a response to Trump's own tariff measures.

The lawsuit also said Canada's dairy supply management involves policies agreed to under the Canada-U.S.-Mexico Agreement on trade, known as CUSMA, which was negotiated during the first Trump administration.

"This has real world consequences on not just the importers but the consumers in both countries," Albrecht said. "And I think it has even broader implications given the nature of the two countries and our historical relationship to each other."

She said she accepts that tariffs are one of Trump's signature policies, but says the way they are being implemented in this case is wrong.

"He has always been in love with tariffs, in my opinion, primarily because it's revenue … I can respect that," Albrecht said. "But in this case, it's wrong and it's violating our Constitution."

WATCH | Fighting the effects of U.S. tariffs:

Feds have hired 'best lawyers' to advise on Stelco next steps, says Joly

7 hours ago|

Duration

0:53

A Trump administration official, commenting on background, said the president's actions will be vigorously defended in court. The official said Tuesday's lawsuit won't deter the president's commitment to levelling the playing field for American workers, farmers and firms.

Concerns beyond Canada

But in the meantime, the Trump administration's actions are leading to consequences for American businesses.

Thomas Gellert, co-chief executive officer of Gellert Global Group, said the company has "spent generations building trusted relationships with suppliers, customers and partners across the food industry."

"These tariffs disrupt those relationships overnight and create costs and uncertainty that ripple through the entire supply chain," Gellert said in the news release.

The company is being hit by the trade war on all sides, it goes on to say. It pays a 50 per cent tariff on imports of Canadian cheese but is also slammed by Ottawa's retaliatory tariffs on the American-made cheeses that its Canadian division sells in Canada.

The company cites the experience of one of its Canadian cheese suppliers to show how the integrated North American market is being disrupted by the tariff dispute. It gets milk from dairy farmers in Upstate New York, which is processed into brie in Canada, which is then sent back to the United States.

"The tariffs hit American farmers and businesses on both sides of that transaction," the news release said.

The case raises concerns beyond Canada, the news release said. If the duties remain unchecked, any president could use Section 338 to impose tariffs and trade restrictions without meaningful congressional control.

The lawsuit asks the court to declare the tariffs unlawful and order a refund.

The Liberty Justice Center was previously involved in the legal challenge against Trump's use of the International Economic Emergency Powers Act of 1977 for the so-called "Liberation Day" and fentanyl-related tariffs on Canada, Mexico and China.

In February, America's top court concluded it was not legal for Trump to use the statute, known as IEEPA, because the U.S. Constitution very clearly gives Congress power over taxes and tariffs.

ABOUT THE AUTHOR

Kelly Geraldine Malone is a reporter for The Canadian Press.