U.S. Food Importer Challenges 50% Section 338 Tariffs on Canadian Goods
A U.S. importer has asked a trade court to void the 50% Canadian-goods tariffs, putting duty collections and cheese costs under legal scrutiny.
Gellert Global Group, a New Jersey food importer, filed a case in the U.S. Court of International Trade on Oct. 20 challenging the Trump administration’s use of Section 338 of the Tariff Act of 1930 to impose 50% duties on specified Canadian imports. The company asks the court to find the tariffs unlawful, halt their enforcement and require refunds, with interest, for duties already paid. [1]
The challenge concerns a tariff program announced through three presidential proclamations signed July 20 and effective Aug. 22, after Canada-U.S. trade discussions broke down. CNBC reports that the measures covered products including hockey sticks, wine, honey and wigs, while the administration characterized the action as a response to alleged Canadian discrimination affecting U.S. motor vehicles, alcohol and dairy. [1]
Gellert says its Canadian cheese imports are subject to the 50% duty. According to the complaint as described by CNBC, the importer brought in $71 million of Canadian cheese in 2025 and previously paid no tariff on those imports under USMCA. It estimates that the Section 338 measure now creates roughly $40 million in annual duty costs on its Canadian cheese entries. [1]
The company says it intends to absorb the added expense through year-end, but argues that this approach cannot be maintained over the longer term. If the tariff remains, Gellert says it could have to raise product prices, potentially reducing sales and customer retention, jeopardizing retail product placements and disrupting suppliers facing higher costs. Those outcomes are allegations and projections in the lawsuit, rather than established market effects. [1]
The complaint advances two central legal arguments: that Section 338 has been displaced by later legislation, and that the administration did not satisfy the statute’s prerequisites even if the law remains available. It argues that the Canadian actions cited in the proclamations do not constitute discrimination against the United States, including because some were retaliatory responses to U.S. tariffs. The White House had not immediately responded to CNBC’s request for comment. [1]
This is a focused judicial challenge to the Section 338 program rather than a ruling on its validity. The filing may create a possible route to relief for importers covered by the duties, but the tariffs remain in force unless and until the trade court grants the requested relief or another government action changes their application. [1]
Significance is moderate because the Oct. 20 filing directly challenges enforcement of the 50% Section 338 tariffs and seeks duty refunds, with immediate exposure for importers such as Gellert’s Canadian-cheese business. It is not rated higher because this is an initial lawsuit, not a court ruling, injunction or confirmed change in tariff treatment; the reported downstream price and supply effects remain the plaintiff’s projections. [1]