NEW YORK | Oct. 20, 2026 — Today, the Liberty Justice Center filed a lawsuit in the U.S. Court of International Trade challenging the administration’s use of Section 338 of the Tariff Act of 1930 to impose 50 percent tariffs on Canadian goods.
Filed on behalf of Gellert Global Group, a third-generation family-run U.S.-based food business, and a proposed class of importers, the lawsuit argues that the administration exceeded its statutory authority, causing immediate harm to American businesses, their suppliers and customers.
Section 338 is a Depression-era statute—part of the 1930 Smoot-Hawley Tariff Act—that no president has used to impose a tariff until this year. It is aimed at specific foreign discrimination against U.S. commerce. The Liberty Justice Center argues that it is not an all-purpose authorization for the executive branch to impose sweeping tariffs or import restrictions whenever a trade dispute arises.
“This case is not about the president. It is about the presidency. 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,” said Sara Albrecht, Chairman and CEO of the Liberty Justice Center.
The challenge centers on the distinction between foreign discrimination and ordinary trade disagreements. Section 338 allows tariffs only to offset foreign discrimination against U.S. commerce. The lawsuit argues that Canadian policies identified by the administration do not justify the sweeping tariffs imposed. Two of the measures arose in response to the president’s own tariffs, while the third involves Canadian dairy policies governed by the U.S.-Mexico-Canada Agreement (USMCA).
The administration also imposed tariffs on products unrelated to the alleged discrimination. Canadian cheese was added to tariff lists intended to address Canadian liquor policies and automobile tariffs, even though the administration’s dairy proclamation does not cover cheese.
The lawsuit also argues that Congress superseded Section 338 with Section 301 of the Trade Act of 1974, which established procedures and safeguards for addressing unfair foreign trade practices.
The administration also violated Section 338’s 30-day waiting period. On September 8, it added Canadian cheeses imported by Gellert to the tariff list but began collecting duties just seven days later. The lawsuit seeks refunds of those prematurely collected tariffs.
“Congress already gave the executive branch a tool for responding to unfair foreign trade practices: Section 301, which requires an investigation, public comment and other safeguards. The administration cannot skip those protections by reaching for a 1930 statute that no president had ever used to impose a tariff,” said Jeffrey M. Schwab, Senior Counsel and Director of Litigation at the Liberty Justice Center.
For Gellert Global Group, the effects extend beyond higher import costs. The company pays a 50 percent tariff on Canadian cheeses it imports, while Canada’s retaliatory tariffs hit American-made cheeses its Canadian division sells in Canada.
Some of those relationships cross the border more than once. One of Gellert’s Canadian cheese suppliers purchases milk from dairy farmers in upstate New York, processes it into brie in Canada and ships the finished cheese back to the U.S. The tariffs hit American farmers and businesses on both sides of that transaction.
“Gellert Global Group has spent generations building trusted relationships with suppliers, customers and partners across the food industry. These tariffs disrupt those relationships overnight and create costs and uncertainty that ripple through the entire supply chain,” said Thomas Gellert, Co-Chief Executive Officer of Gellert Global Group.
The case raises concerns beyond Canada. If Section 338 can be used as a broad tariff authority here, it could become a standing tool for presidents of either party to impose tariffs or import restrictions on other trading partners without meaningful congressional control.
The lawsuit continues the Liberty Justice Center’s broader effort to enforce constitutional and statutory limits on presidential tariff authority. LJC successfully challenged unlawful tariffs imposed under the International Emergency Economic Powers Act (IEEPA) and is challenging the misuse of Section 122 and the administration’s attempt to use Section 301 as a replacement vehicle for broad global tariffs.
“We have challenged these tariffs under IEEPA, Section 122, Section 301 and now Section 338 for the same reason: 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,” Albrecht said.
The case does not ask the court to decide whether tariffs are wise economic policy. It asks whether the executive branch followed the law Congress wrote. The lawsuit asks the court to declare the tariffs unlawful, block their collection and order refunds, with interest, to the importers who paid them. LJC also filed a motion seeking a preliminary injunction to stop the tariffs and a motion for summary judgment.
Case: Gellert Global Group Corp. v. Trump
Court: U.S. Court of International Trade
Filed: October 20, 2026
Complaint: Filed Complaint
Media Contact:
Neil Strauss
Director of Communications, Liberty Justice Center
[email protected]