A fresh court battle over US President Donald Trump’s trade policy has emerged after an American food importer and a legal advocacy group challenged 50% tariffs on Canadian products, arguing that the administration relied on a law that does not give the president unlimited power to impose trade penalties.
The Liberty Justice Center filed the case at the US Court of International Trade on behalf of Gellert Global Group, seeking to have the duties ruled unlawful and importers compensated through refunds with interest.
The legal group previously secured a victory against Trump’s sweeping “liberation day” tariffs. Its latest action targets levies imposed on about $20 billion worth of Canadian goods after trade negotiations between Washington and Ottawa broke down in August.
The plaintiffs argue that the White House exceeded its authority and caused "immediate harm to American businesses". The administration has been contacted for comment.
Gellert Global Group, a family-owned food company based in New Jersey, has been paying the 50% duties on cheese brought in from Canada. It is also affected by Canada’s retaliatory tariffs on American-made cheese sold in the Canadian market.
Co-chief executive Thomas Gellert said the measures had disrupted business ties built over generations, while introducing additional costs and uncertainty for companies operating across the food supply chain.
"These tariffs disrupt those relationships overnight and create costs and uncertainty that ripple through the entire supply chain," he said on Tuesday.
At the centre of the dispute is Section 338 of the Tariff Act of 1930, which the Trump administration has invoked to impose duties on a range of Canadian products, including wine, dairy goods and hockey sticks.
The provision was intended to shield American businesses from discrimination by foreign countries. However, the Liberty Justice Center argues that it was not designed to give the executive branch sweeping authority to impose trade restrictions whenever disagreements arise between countries.
The group says the law does not allow the government "to impose sweeping tariffs or import restrictions whenever a trade dispute arises".
The lawsuit also disputes the administration’s use of Canada’s retaliatory measures as grounds for imposing its own tariffs under Section 338.
Canada has responded to various US trade duties with a series of countermeasures. Last month, Prime Minister Mark Carney imposed matching tariffs “dollar for dollar” under the same section after Trump accused Canada of treating American cars, dairy products and alcohol unfairly.
Another key issue in the case is whether the administration followed the law’s requirement for a 30-day waiting period before introducing tariffs.
According to the lawsuit, certain products, including cheese, were added to the list of goods facing the duties only about a week before tariff collection started, raising questions about whether the required notice period was observed.
Liberty Justice Center chief executive Sara Albrecht said the case was about the limits of presidential authority rather than a personal dispute with Trump.
"No president should have the power to pull a dormant statute off the shelf and use it to impose sweeping tariffs or import bans without the limits Congress required," she said.
The plaintiffs also contend that Section 338 of the 1930 Tariff Act has been overtaken by Section 301 of the Trade Act of 1974.
They argue that even if the older provision remains valid, the administration has not demonstrated a lawful basis for using it to impose broad tariffs on Canadian imports.
Explaining the grounds for the challenge, the Liberty Justice Center said it was questioning the legal process behind the tariffs, not the use of trade duties in general.
"The case is not an objection to tariffs as such. It asks who has the power to impose them and whether the executive branch followed the law Congress wrote," the group said.
The legal team has also asked the court for a preliminary injunction that would stop the government from collecting the tariffs while the case is being considered.
The lawsuit is the fourth tariff-related case brought by the Liberty Justice Center against Trump’s administration. The group previously won a challenge to broad duties imposed under the International Emergency Economic Powers Act (IEEPA), which were struck down in February this year.
Albrecht said the cases all stemmed from the need to uphold the constitutional powers assigned to Congress, particularly its role in setting tariffs.
"The Constitution gives tariff power to Congress. The executive branch cannot keep moving the same policy from one statute to another and pretend the limits disappear"