New Jersey Food Distributor Sues Trump Administration Over 50% Tariffs on Canadian Goods
Gellert Global Group, a New Jersey-based food distributor, has filed a lawsuit challenging 50 percent tariffs on certain Canadian goods, including cheese. The company faces an estimated $40 million annual tariff bill and argues the measures are legally flawed under Section 338 of the U.S. Tariff Act.
A New Jersey-based food distributor is taking legal action against the Trump administration over 50 percent tariffs imposed on certain Canadian goods, seeking refunds for what it describes as unsustainable trade measures.
Gellert Global Group imports roughly $80 million worth of Canadian cheeses annually. Under the new tariff structure, the company faces a potential $40 million annual tariff bill. Chief Executive Thomas Gellert stated that the company is currently absorbing the cost of the tariffs because its customers will not accept price increases.
The tariffs are imposed under Section 338 of the U.S. Tariff Act, also known as the Smoot-Hawley Act. This Depression-era statute allows tariffs of up to 50 percent on countries deemed to be discriminating against the United States. The Trump administration justified invoking the law by citing Canada's retaliation against previous U.S. tariffs, specifically mentioning bans on American alcohol, dairy protections, and auto sector measures.
Initially, the tariffs applied to roughly $28 billion worth of Canadian goods, including cement, road salt, and hockey sticks. The list of targeted products has since been adjusted twice. Some of those adjustments were made at the request of Republican Sen. Susan Collins of Maine to exempt products important to her state's businesses.
The lawsuit was filed by the Liberty Justice Center, a non-profit legal advocacy organization that previously challenged the administration's tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The suit contends that the administration improperly invoked the dormant statute without sufficient justification linking specific Canadian actions to the targeted products.
Legal expert Ryan Majerus suggested there is a good chance the tariffs could be reversed due to difficulties in establishing that link between Canada's actions and the specific goods being taxed.
Gellert warned that if the tariffs continue, he may stop importing Canadian goat cheese entirely. Such a move risks the loss of shelf space for Canadian products in the U.S. market and could cause Ontario-based Mariposa Dairy to cull goats due to a lack of demand.