A U.S. food importer is taking Donald Trump to court over his 50% tariffs on certain Canadian goods, arguing that the president has stretched a 96-year-old trade law beyond its limits. Gellert Global Group filed the lawsuit on October 20, asking the U.S. Court of International Trade in New York to stop the duties and order refunds.

For the family-run business, based in Elizabeth, New Jersey, the dispute comes with an estimated $40 million annual tariff bill on Canadian cheese. Gellert says it is absorbing the costs through the end of 2026, squeezing its margins and delaying hiring and investment.

The Liberty Justice Center filed the complaint for Gellert and a proposed class of affected importers. The case challenges how the administration used Section 338 of the Tariff Act of 1930.

Sara Albrecht, the center's chairman and CEO, said the dispute concerns the powers of the office, whoever holds it:

“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.”

What the old law actually allows

Section 338 is aimed at foreign discrimination against American commerce. The law allows additional duties of up to 50% to offset the resulting burden or disadvantage. It also provides for excluding imports if the discrimination continues after a proclamation.

Trump invoked it in three July 20 proclamations concerning alcoholic beverages, dairy and motor vehicles. In the alcohol order, he argued that Canadian provincial restrictions singled out U.S. products while allowing drinks from other countries. He said additional duties would offset that disadvantage, support U.S. producers and encourage Canada to remove the restrictions.

Gellert's lawyers contest that reasoning. They argue that retaliating against earlier U.S. tariffs is different from the discrimination the statute addresses. They also dispute using Canada's dairy arrangements under the U.S.-Mexico-Canada Agreement to justify the measures.

A seven-day gap is another point of attack

The administration expanded the tariff lists on September 8 and directed that the changes take effect September 15. Gellert says newly covered cheeses were therefore taxed after seven days, despite Section 338's 30-day waiting period.

The September proclamation confirms those dates. It also cites the president's authority to amend earlier proclamations, putting the treatment of newly added products directly into dispute.

There is another mismatch in the complaint: Canadian cheeses were added to tariff lists addressing liquor restrictions and automobile duties. The lawyers say the dairy proclamation itself does not cover cheese, and argue that the administration failed to connect the products taxed with the commercial disadvantage it identified.

The lawsuit also makes a broader legal argument. Gellert says Congress superseded Section 338, or constrained its use, through Section 301 of the Trade Act of 1974, which sets out investigations, public participation and other procedures for tackling unfair trade practices.

The costs cross the border more than once

The company imported roughly $71 million in Canadian cheese in 2025, according to its filing. Its products include brie, camembert, goat cheese and mascarpone, supplied through relationships it says would be difficult to replace without disrupting customers.

Thomas Gellert, the company's co-chief executive, described that pressure in a statement:

“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.”

The company says it paid at least $520,538 in Section 338 duties across 22 Canadian cheese entries between September 16 and October 11. Alongside its complaint, its lawyers sought a preliminary injunction and summary judgment, requesting an end to collection and refunds with interest.

One supplier illustrates why the damage can reach American farms, too. Gellert says its Ontario brie producer buys milk from dairies in upstate New York, makes the cheese in Canada and ships it back to the United States.