A new legal challenge has been filed against President Donald Trump’s imposition of 50% tariffs on various Canadian goods, marking another front in the ongoing trade disputes between the U.S. and Canada. The lawsuit was filed by Gellert Global Group, a New Jersey-based food importer, which claims the tariffs unlawfully impact their imported Canadian cheeses. These duties were enacted under Section 338 of the Tariff Act of 1930, a rarely used statute Trump invoked in July to target Canadian exports like hockey sticks, wine, and honey, in retaliation for perceived Canadian trade discrimination.

Gellert Global, represented by the Liberty Justice Center—the same group responsible for successfully overturning Trump’s reciprocal tariffs at the Supreme Court earlier this year—seeks a court declaration that the tariffs are illegal and demands refunds for duties already paid, including interest. The suit argues that Section 338 is outdated and has been effectively repealed by newer laws, and that even if the statute is valid, the Trump administration failed to properly meet the law’s strict requirements on imposing tariffs. Specifically, the complaint contends that Canadian actions cited as discrimination are either lawful retaliation or negotiated trade terms under USMCA.

The Trump administration enacted these tariffs through three presidential proclamations targeting Canadian motor vehicle, alcohol, and dairy sectors after trade talks between the two countries collapsed. Canada retaliated with matched tariffs on U.S. products, escalating trade tensions. Gellert Global, which generated $1.7 billion in revenue in 2025 and imported $71 million worth of Canadian cheese that year, now faces a steep 50% tariff on those imports, costing nearly $40 million annually. The company warns that sustained tariffs could lead to higher consumer prices, lost sales, and supply chain issues as producers struggle with increased costs.

The Liberty Justice Center emphasizes that this case is about preserving the constitutional limits on presidential trade powers, warning against allowing the executive branch to revive dormant laws to impose sweeping tariffs without congressional approval. The White House has not yet responded to the lawsuit. Meanwhile, the Trump administration is in the process of reimbursing importers some $166 billion collected under previously struck-down reciprocal tariffs, while other related suits challenge Trump’s use of trade laws. This lawsuit adds new uncertainty to the fraught U.S.-Canada trade relationship ahead of the 2026 midterms.