A tariff fight involving American-made cars is now being challenged by a company that imports Canadian cheese. On October 20, 2026, Gellert Global Group filed a U.S. lawsuit seeking to stop President Donald Trump’s 50% duties on selected Canadian goods and recover tariffs already paid.
The connection runs through Washington’s objection to Canada’s treatment of U.S.-built vehicles, including counter-tariffs and relief tied to Canadian production. Those policies helped justify measures that reached well beyond the auto industry. The case now puts a rarely used 1930 trade law under scrutiny, with an American importer arguing that the administration exceeded Congress’s limits. For businesses on both sides of the border, the dispute concerns the cost of shipments already moving through established supply chains.
An American Food Importer Brings the Challenge
Gellert Global Group Corp., headquartered in Elizabeth, New Jersey, filed the case in the U.S. Court of International Trade. The third-generation family food business is represented by the Liberty Justice Center. Its complaint estimates that the challenged tariffs will cost it about US$40 million annually. That is the company’s projection of its duty burden, rather than a court finding or a calculation of what consumers will ultimately pay at the grocery checkout.
The company is asking the court to invalidate the tariffs, stop their collection and order refunds with applicable interest. It also seeks to represent a class of affected importers, which would extend the potential reach of the litigation beyond its own shipments if the court certifies the class. For Canadian suppliers, the identity of the plaintiff is significant. An American customer is challenging the cost of bringing their products into its home market, illustrating how a measure directed at Canadian exports can create an immediate business problem inside the United States.
The Canadian Vehicle Rules at the Centre of the Dispute
Canada’s automobile counter-tariffs took effect on April 9, 2025. Covered U.S.-made vehicles that do not qualify under the Canada–United States–Mexico Agreement face a 25% surcharge on their full customs value. Qualifying vehicles receive different treatment: the surcharge excludes Canadian and Mexican content. Canadian border guidance generally permits a 15% deduction for that content, with a larger exclusion available when importers substantiate it. CUSMA is Canada’s name for the agreement known in the United States as USMCA.
The distinction matters when translating a headline rate into an actual bill. Consider a qualifying vehicle with a hypothetical customs value of C$40,000. Applying the standard 15% deduction leaves C$34,000 subject to the 25% surcharge, producing C$8,500 in counter-tariffs before any remission. That calculation illustrates the border charge; it does not predict a dealership’s selling price. It also explains why rules about a vehicle’s origin and components became central to a dispute that eventually affected products far removed from car assembly lines.
Tariff Relief Comes with a Canadian Production Commitment
Canada also offers eligible manufacturers relief from the automobile counter-tariffs through a remission system. Its renewed order covers April 9, 2026, through April 8, 2027, allowing specified quantities of qualifying U.S.-made vehicles to enter without the surcharge. The benefit is tied to maintaining Canadian production and fulfilling investment commitments. Company-specific allocations remain confidential, which limits what outsiders can calculate about the value of each manufacturer’s relief from publicly available information.
The policy gives manufacturers a practical reason to keep Canadian factories operating while continuing to bring vehicles north from American plants. The order also accommodates temporary shutdowns for retooling, subject to conditions including production restarting in accordance with requirements set by the responsible ministers. That detail matters for an industry in which changing a factory’s output can interrupt assembly. Ottawa presents remission as support for Canadian production and investment. Washington’s objection is that access to relief depends on activity in Canada, making a factory’s location part of the trade dispute alongside the vehicle’s origin.
Washington Says the Rules Discriminate Against U.S. Vehicles
The White House’s July 20 motor-vehicle proclamation treated Canada’s counter-tariffs and production-linked relief as discrimination against American commerce. It cited a 22% decline in Canadian imports of U.S. motor vehicles from April 2025 through March 2026 compared with the preceding twelve months. That figure belongs to the administration’s stated justification. It does not, by itself, establish how much of the decline resulted from Canadian policy rather than other changes affecting vehicle demand and trade.
Gellert challenges the legal basis for that conclusion, arguing that Canada’s response to American tariffs does not satisfy the discrimination requirements of the law Trump invoked. The distinction is contested: describing a measure as retaliation does not automatically settle whether it is discriminatory under a particular statute. The Associated Press reported that the White House intends to defend its use of the authority vigorously. The court must assess the legal requirements and the challenged actions, rather than decide which government has the more persuasive political account of how the trade conflict began.
A 1930 Law Supplies the Authority—and Its Limits
Section 338 of the Tariff Act of 1930, now codified at 19 U.S.C. §1338, expressly permits additional duties when its conditions are met. The president must make findings about unequal treatment or discrimination that disadvantages U.S. commerce and determine that action serves the public interest. The statute links the duties to offsetting that disadvantage and caps the increase imposed under this authority at 50% of the goods’ value. It also specifies a 30-day interval before collection.
Those requirements explain why the case involves more than whether an old law remains politically acceptable. A statute’s age does not establish that its powers have vanished. Equally, the existence of tariff authority does not answer whether a particular use stays within Congress’s conditions. The question is how those conditions constrain the president’s findings, choice of products and level of duties. The 50% ceiling applies to this authority specifically; it is not a guarantee that a product’s combined duties under every applicable trade measure cannot exceed that figure.
The Lawsuit Argues Newer Trade Legislation Changed the Rules
Gellert’s challenge also asks how Section 338 fits with laws Congress passed decades later. The company argues that subsequent trade legislation, particularly Section 301 of the Trade Act of 1974, displaced the older authority or governs the action at issue. The Section 301 framework involves investigations, consultation with the trading partner, published determinations and opportunities for public input. Whether that later framework actually removes or restricts Section 338 authority is a question raised by the lawsuit, not an established result.
The company separately argues that the administration failed to satisfy Section 338 itself. It also advances a constitutional argument: if the provision grants the president the sweeping discretion asserted, the delegation of Congress’s legislative power would be impermissibly broad. These arguments provide several possible paths for judicial review, but they should not be blended into a single claim that the statute has already been repealed. A court could accept or reject individual arguments without endorsing every position taken by either side in the wider tariff debate.
How Canadian Cheese Ended Up in the Automobile Dispute
The unusual product mix is visible in the government’s own tariff documents. The September amendment to the motor-vehicle proclamation added a tariff classification covering certain cheeses. Gellert says its brie, goat cheese and camembert are among the products charged under that automobile-related measure. Other cheeses it imports fall under the separate proclamation concerning alcoholic beverages. The company’s experience shows why the title of a trade action cannot substitute for checking the product classifications actually listed in its annexes.
For a food importer, the commercial consequence is straightforward even when the policy connection seems distant: a cheese shipment can incur duties imposed in response to rules about cars. Legally, however, that mismatch does not resolve the case on its own. Section 338 permits duties on products from the country concerned without expressly restricting them to the same industry. The dispute therefore turns on the statutory conditions and the relationship between the duties and the disadvantage they are supposed to offset.
A Seven-Day Rollout Creates a Separate Legal Challenge
The timing argument concerns the September expansion of the product lists. The original duties began on August 22 after a short postponement. New proclamations dated September 8 added products, with collection on those additions beginning September 15. Gellert argues that this seven-day interval violated Section 338’s requirement to wait 30 days after a proclamation before collecting the specified duties. Its complaint seeks refunds for the allegedly premature collections from September 15 through October 7.
That claim could matter even if the administration defeats broader challenges to its tariff powers. A court might have to decide whether adding goods through an amendment triggers a fresh waiting period and what remedy an early collection would require. For importers, the practical question would concern payments made during a defined period, rather than every duty ever collected under the measures. The difference is financially meaningful: a narrow ruling about implementation dates could produce a different result from a judgment invalidating the tariff programme as a whole.
A Cheese Supply Chain Crosses the Border Twice
The Liberty Justice Center describes one relationship that makes the economic stakes tangible. A Canadian supplier buys milk from dairy farmers in upstate New York, turns it into brie in Canada and ships the finished cheese back to the United States. Although the imported product is Canadian, American agricultural businesses participate in its production. That example helps explain why a tariff aimed at another country can raise concerns among domestic firms connected to the same supply chain.
The immediate arithmetic can be substantial. A hypothetical covered shipment with a customs value of US$100,000 would attract US$50,000 in additional duties at a 50% rate, before other applicable charges. That does not establish a 50% rise in the eventual supermarket price. Possible responses include an importer accepting a smaller margin, negotiating with suppliers or customers, or changing purchasing plans. Each would distribute the pressure differently. The lawsuit’s commercial significance lies partly in that uncertainty: businesses must make decisions about orders and relationships while the legality of the added cost remains disputed.
The 50% Rate is Only Part of a Changing Tariff Picture
The disputed duties apply to selected Canadian products, so the headline should not be read as a uniform 50% tax on every shipment from Canada. September’s changes expanded some product lists and removed other items. They also allowed the Section 338 duties to apply alongside relevant Section 232 duties, reversing an earlier exclusion. Qualifying for CUSMA preferences does not itself provide an exemption from these Section 338 measures. Separate September actions introduced import bans on specified products effective September 29.
For a business assessing a shipment, the important details therefore include its classification, origin, entry date and the measures that cover it. A single percentage cannot capture every combination. The same distinction limits what this lawsuit could accomplish: invalidating the challenged U.S. duties would not automatically repeal Canada’s automobile counter-tariffs or unrelated American duties imposed under other authorities. Canada’s current published guidance continues to list its 25% automobile counter-tariffs. Any eventual judgment would need to be read for the particular measures, goods and payments it actually addresses.
An Earlier Tariff Ruling Does Not Decide this Case
On February 20, 2026, the Supreme Court held that the International Emergency Economic Powers Act did not authorize the president to impose tariffs. That judgment forms part of the background to the new challenge, but the legal question here is different. Section 338 explicitly refers to duties and sets conditions for using them. The earlier decision therefore does not automatically invalidate these Canadian tariffs; the court must examine the authority and limitations relevant to this case.
Gellert has requested a preliminary injunction and summary judgment, while its lawyers list the case as pending. Those requests are not court orders, and filing the lawsuit does not itself stop collections or secure refunds. Whether immediate relief is warranted, how the statutory arguments should be resolved and whether a class should be certified remain consequential questions. Until the court acts, the dispute’s human scale remains visible in ordinary commercial decisions: an importer pricing its next order, a supplier planning production and farmers whose milk becomes cheese across the border.
