Cato Institute Challenges Trump’s 50% Tariffs on Canadian Imports
The Cato Institute filed an amicus brief challenging Trump’s Section 338 tariffs on Canada.
Why it matters: This challenge questions the legal authority behind tariffs that affect $20 billion in Canadian imports, influencing cross-border trade and compliance for companies and lawyers alike.
- President Trump imposed 50% tariffs on $20 billion of Canadian goods under Section 338 of the Tariff Act on August 22, 2026.
- Gellert Global Group Corp. filed a lawsuit on October 20, 2026, contesting the legality of these tariffs.
- On November 13, 2026, the Cato Institute and legal scholar Ilya Somin filed an amicus brief citing statutory and constitutional issues, including the major questions and nondelegation doctrines.
- The tariffs’ use of Section 338 is unprecedented and has raised significant legal questions about executive authority.
In July 2026, President Donald Trump invoked Section 338 of the Tariff Act of 1930 to impose 50% tariffs on approximately $20 billion worth of Canadian imports, including motor vehicles, dairy products, and alcoholic beverages, citing Canadian trade policies as justification. The tariffs took effect on August 22, 2026, after a 30-day preliminary period and a brief suspension.
Canadian retaliation followed swiftly, escalating trade tensions, while U.S. importers voiced concerns over the tariffs’ legality. On October 20, 2026, New Jersey-based importer Gellert Global Group Corp. filed a lawsuit in the U.S. Court of International Trade to challenge these tariffs.
Supporting Gellert's suit, the Cato Institute and legal scholar Ilya Somin filed an amicus brief on November 13, 2026. They argue that the tariffs exceed the scope of presidential authority under Section 338 and violate constitutional doctrines, including the major questions doctrine, which requires clear congressional authorization for actions of vast economic and political significance, and the nondelegation doctrine, which restricts the executive branch’s power when Congress has not provided clear legislative guidance.
Legal experts note that Section 338 has never before been tested in court. Ryan Majerus, former U.S. trade official and King & Spalding partner, described the law as "literally a blank canvas because it's never been litigated." Moreover, Somin highlights that the Canadian measures Trump cited do not, in fact, discriminate against U.S. goods, which raises questions about the statute’s application.
This legal controversy has major implications for the enforcement of trade policy and the balance of executive power in tariff imposition, which could affect future U.S.-Canada trade relations and set precedents for how broad presidential tariff authority can be.
By the numbers:
- 50% — tariff rate imposed on Canadian imports under Section 338
- $20 billion — value of Canadian goods affected by the tariffs
- August 22, 2026 — date tariffs became effective
- October 20, 2026 — date Gellert Global Group Corp. filed a lawsuit
Yes, but: While the amicus brief challenges the tariffs' legal basis, the ultimate judicial ruling on the constitutionality and statutory limits of Section 338 remains pending.
What's next: The U.S. Court of International Trade will assess Gellert Global Group Corp.'s lawsuit, with potential rulings informing the scope of presidential tariff powers and future trade enforcement.