WASHINGTON (AP) — A New Jersey food importer filed a lawsuit Tuesday challenging President Donald Trump’s authority to invoke a Great Depression-era law to impose 50% tariffs on $20 billion in Canadian goods.
The Gellert Global Group, a third-generation family business that imports Canadian cheese, took its case to the United States Court of International Trade, a specialized court in New York.
In August, Trump I came back to article 338 of the Tariff Act of 1930 to impose tariffs on Canada, incentivizing dollar-for-dollar trade Ottawa retaliation and already strained relations between neighbors and longtime allies. Last month, the president escalated the conflict by announcing an outright ban on nearly a billion dollars worth of Canadian products, including alcoholic beverages, dairy products and motorcycles.
The president’s tariff authority under Section 338 has never been used in a trade dispute, much less tested in court.
“No president should have the power to take away pending legislation and use it to impose drastic tariffs or import bans without the limits Congress requires,” said Sara Albrecht, president of the Liberty Justice Center, a libertarian advocacy group that represents Gellert’s firm and which successfully challenged Trump’s previous tariffs at the Supreme Court earlier this year.
The White House has said the administration will vigorously defend Trump’s tariffs on Canadian imports and views Section 338 as appropriate to counter what the administration sees as Canadian discrimination against U.S. exports of dairy, alcohol and automobiles.
Since returning to the White House last year, Trump has sought to erect a wall of protective tariffs – import taxes – around the US economy. The original centerpiece of this policy was his use of a 1977 law to declare the United States’ long-standing trade deficits a national emergency, justifying double-digit tariffs on almost every country. But the Supreme Court struck down those tariffs in February, and the Trump administration was forced to refund billions of dollars to importers who paid them.
Trump has since sought another legal authority to tax imports. In July, for example, it hit dozens of U.S. trading partners with tariffs of 10 to 12.5 percent, accusing the country of not having done enough to crack down on imports produced by forced labor. These prices are also contested in court.
He then invoked Section 338 to sanction Canada for allegedly discriminating against American dairy, automobile and alcohol products.
As Section 338 sat unused for decades, Congress passed new trade laws. Some of them ceded to the president the tariff power, which the Constitution originally granted to Congress. But the new laws also limited the president’s authority to certain circumstances — including in the face of national security threats and currency crises — and required the government to conduct investigations and satisfy other procedural requirements first.
The Liberty Justice Center says the new trade legislation replaced the president’s Section 338 tariff authority and made it obsolete.
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