Liberty Justice Center sues to block Trump's 50% Canadian tariffs

Key points

• Liberty Justice Center sued to block 50% tariffs on $20bn of Canadian goods, arguing Section 338 of the 1930 Tariff Act was misused and procedurally violated.
• Gellert Global Group, a New Jersey cheese importer, faces 50% duties on Canadian cheese, costing an estimated $40 million annually, and seeks refunds with interest.
• The lawsuit claims the White House bypassed the 30-day waiting period required by Section 338 and that the law has been superseded by newer trade statutes.
• This is the fourth major legal challenge by the Liberty Justice Center against Trump's tariffs, following a successful Supreme Court case that struck down 'liberation day' tariffs in February 2026.
• Canada retaliated with 'dollar for dollar' tariffs on U.S. goods after the U.S. imposed the Section 338 duties, escalating the trade war between the two countries.

Background

The U.S.-Canada trade dispute intensified in August 2026 after trade talks collapsed, leading Trump to impose 50% tariffs on $20 billion of Canadian goods using Section 338 of the 1930 Tariff Act, a law not previously used for trade disputes. Canada retaliated with matching tariffs, and in September, the U.S. imposed additional import bans on $19.9 billion of Canadian products, including dairy and alcohol. The Liberty Justice Center had previously won a Supreme Court case in February 2026 that struck down Trump's 'liberation day' tariffs, forcing the administration to refund $166 billion to importers.

How outlets are covering it

BBC and CNBC emphasize the legal arguments against Section 338, noting it is a dormant law that has never been used for trade disputes and may have been superseded by newer statutes. WRAL highlights the broader context of Trump's tariff strategy, including his use of other laws like the 1977 emergency powers act, which was struck down in February. The New York Times focuses on the pattern of legal challenges, noting that the Court of International Trade has repeatedly ruled against Trump's tariff actions. All sources agree that the lawsuit seeks to invalidate the tariffs and order refunds, but they differ in emphasis: BBC and CNBC focus on the specific legal flaws, WRAL on the broader trade war, and The New York Times on the recurring pattern of legal defeats.

Why it matters

The lawsuit tests the limits of presidential power to impose tariffs without congressional approval, a core issue in U.S. trade policy. If the court rules against the administration, it could force refunds for billions of dollars in duties and set a precedent that restricts future executive use of trade laws. The case also affects the U.S.-Canada trade relationship, which is already strained by retaliatory tariffs and import bans, and could impact American businesses like Gellert Global Group that rely on cross-border supply chains.

What to watch

The U.S. Court of International Trade will review the lawsuit and may issue a preliminary injunction to block the tariffs. The White House and the Office of the U.S. Trade Representative have not yet responded to the suit. If the court rules in favor of the plaintiffs, the administration may be forced to refund duties paid by importers, potentially costing billions of dollars. The case could also influence future trade disputes and the administration's ability to use other trade laws to impose tariffs.