A new lawsuit claims the administration started collecting 50 percent tariffs on Canadian cheeses three weeks too soon, putting a family importer on the hook and testing a 1930 law in court.
Story Highlights
- Liberty Justice Center filed a Court of International Trade case challenging Section 338 tariffs.
- The suit says customs began collecting duties seven days after listing, not after 30 days.
- White House materials say tariffs apply even to goods that qualify under the USMCA.
- Tariffs target sectors tied to alleged Canadian discrimination: alcohol, dairy, and autos.
Who Sued and What They Want the Court to Do
Liberty Justice Center filed Gellert Global Group Corp. v. Trump at the U.S. Court of International Trade on October 20, 2026. The suit seeks a preliminary injunction to halt collection, summary judgment on the merits, and refunds of duties already paid. Gellert is a New Jersey family-run importer that brings in Canadian cheeses and says the new duties hit its core business. The filing names concrete entries and asks the court to stop the charges now while the case proceeds.
The complaint argues that Section 338 of the Tariff Act cannot be used as a catch‑all tool for broad tariff policy. It claims Congress later passed modern trade laws that set clearer steps and timelines, and that those newer laws largely took over. The suit frames Section 338 as a narrow, retaliation measure from another time, not a blanket authority for sweeping, long‑running tariffs at a flat 50 percent rate.
Why the 30‑Day Waiting Period Matters
The case highlights a specific timing claim. According to Liberty Justice Center, Canadian cheeses were added to the tariff list on September 8, 2026. The government began collecting seven days later. The complaint says Section 338 calls for a 30‑day wait before collection starts, so importers have time to adjust. If the court agrees, early collection could be unlawful, and Gellert could recover duties on those entries while the broader questions move forward.
This timing dispute sits alongside a larger policy fight. White House releases say the 50 percent duties respond to Canadian discrimination that harms U.S. commerce. The administration says Section 338 directs the President to impose extra duties to offset that burden, up to the 50 percent cap. That framing presents the tariffs as a tool to level the field for American producers facing unfair treatment in Canada’s alcohol, dairy, and auto markets.
USMCA Goods Are Not Exempt Under the Proclamations
The White House fact sheet states the Section 338 duties apply to covered Canadian goods even if they originate under the United States‑Mexico‑Canada Agreement. That means importers cannot rely on the trade agreement’s normal duty‑free path to avoid these extra charges. The administration calls this an intentional enforcement choice to ensure the remedy is broad and consistent across listed products, regardless of their USMCA status.
This point could become a key legal and policy battleground. The lawsuit hints that modern agreements and laws create limits on using an old statute this way. But the administration maintains that Section 338 stands on its own and allows targeted tariffs to counter discrimination. The court will decide which view fits the text, the later trade framework, and the record that supported the proclamations and timing choices in 2026.
How Broad the Tariffs Are and What Comes Next
Presidential proclamations and fact sheets describe additional 50 percent duties on defined Canadian goods tied to the alcohol, dairy, and motor vehicle sectors. The measures are meant to offset the identified harm to U.S. exporters. Because the duties are large and apply in addition to other trade measures, the economic stakes for importers and downstream buyers are high. If the court narrows timing or scope, many entries could be affected, and refunds could grow to significant sums.
The administration’s posture is clear: Section 338 authorizes the response, including against United States‑Mexico‑Canada Agreement‑origin goods, and remains a valid tool for fair trade. Liberty Justice Center’s suit counters that the statute is outdated, was applied too fast, and cannot lawfully carry tariffs this sweeping. The next steps likely include a briefing schedule on the injunction and a fast look at the timing claim, which may set the tone for the broader fight.
Limitations and What We Still Do Not Know
The public record does not include the full complaint text, case number, or detailed counts. The government’s internal findings on Canadian discrimination, and the exact method used to pick 50 percent, are not public either. Those facts will matter. The timing claim is concrete and easy to test with entries and notices, while the larger questions on statutory scope and trade‑agreement fit will need fuller records and careful review in court.
Conservative readers should watch two tracks. First, the near‑term ruling on whether early collection broke the statute’s waiting rule. Second, the long‑term decision on whether Section 338 supports broad modern tariffs when newer trade laws and agreements are in place. Both outcomes will shape how America enforces fair trade without giving agencies room to sidestep clear limits set by Congress and treaty law.
Sources:
reason.com, libertyjusticecenter.org, whitehouse.gov
