Section 338 Tariff Act Canada Lawsuit, Gellert Global Group Challenges Trump’s 50% Tariffs

A New Jersey food importer has sued the Trump administration over 50% tariffs on certain Canadian imports imposed under Section 338 of the Tariff Act of 1930 (19 U.S.C. § 1338). It argues the president used a nearly century-old trade law beyond the authority Congress gave him.

Gellert Global Group Corp. v. Trump was filed on October 20, 2026, in the U.S. Court of International Trade (CIT). Gellert is a family-owned importer of Canadian cheese. It says the tariffs raise its costs and threaten its relationships with Canadian suppliers and U.S. farmers. The Liberty Justice Center, which also represented small businesses in the earlier IEEPA tariff challenge, is involved in the case.

The complaint has four main claims:

1. Section 301 of the Trade Act of 1974 superseded or limits Section 338.
2. The tariffs exceed what Section 338 authorizes.
3. Reading Section 338 to allow these tariffs would violate the nondelegation doctrine.
4. The government collected duties on newly added products before Section 338’s 30-day waiting period ended. [1]

The lawsuit has not established that the tariffs are unlawful. As of October 21, 2026, I could not verify any ruling on the new challenge. The administration maintains that Section 338 authorizes its response to what it calls discriminatory Canadian trade practices.

Quick Facts: Gellert Global Group Corp. v. Trump

Detail	Information
Plaintiff	Gellert Global Group Corp.
Defendants	President Donald Trump (official capacity); Executive Office of the President; United States; U.S. Customs and Border Protection (CBP); CBP Commissioner Rodney S. Scott; U.S. Trade Representative Jamieson Greer; Office of the U.S. Trade Representative
Case number	26-cv-04636
Court	U.S. Court of International Trade
Complaint filed	October 20, 2026
Tariff law	Section 338 of the Tariff Act of 1930, 19 U.S.C. § 1338
Competing law	Section 301 of the Trade Act of 1974, 19 U.S.C. § 2411
Tariff rate	50% ad valorem on covered Canadian-origin products
Proclamations	11046 (alcohol), 11047 (dairy), 11048 (motor vehicles), issued July 20, 2026; amended by Proclamations 11064 and 11065 on September 8, 2026
Tariffs took effect	August 22, 2026, after a three-day suspension
Gellert’s estimated annual tariff cost	Approximately $40 million
Duties on newly added cheese entries before October 8	More than $381,000, according to the complaint
Class status	Putative (proposed) class of importers of record; not certified
Relief requested	Preliminary injunction, declaration of unlawfulness, refunds with interest
Public consumer claim form	None
Latest verified status	Filed; no merits ruling verified as of October 21, 2026

The case details come from the complaint. The $40 million, $381,000 and related figures are the plaintiff’s allegations, not court findings. [1][2]

What Is Section 338 of the Tariff Act of 1930?

Section 338 is part of the Smoot-Hawley Tariff Act of 1930. It allows additional duties when the president makes specified findings that a foreign country has discriminated against U.S. commerce. Gellert says no president used it to impose tariffs in the 96 years before 2026. Press coverage describes the use as unprecedented. [1]

What does Section 338(a) require?

It lets the president proclaim additional duties after findings of conduct such as:

• An unreasonable charge, regulation or limitation affecting U.S. products that is not equally imposed on like goods from other countries.
• Discrimination through duties, fees, classifications or restrictions that puts U.S. commerce at a disadvantage compared with other countries.

The test is not whether Canada adopted a policy some U.S. exporters dislike. Commentators note that Section 338 speaks to discrimination against the United States as compared with other countries.

What does Section 338(b) allow?

After an initial proclamation, if the discrimination continues or increases, the president may exclude specified products from importation. Separate 2026 proclamations also excluded some Canadian goods from entry. Whether that satisfies the statute is a distinct question from whether the 50% duties are valid.

What does Section 338(c) allow?

A proclamation can cover a whole country or a subdivision, and the president may suspend, revoke, supplement or amend it. The government may rely on this to defend the September product-list changes. Gellert argues amendment power does not erase the 30-day waiting period for newly listed goods.

What does Section 338(d) say about the 50% limit and 30-day wait?

Duties may be set to offset the burden or disadvantage caused by the discrimination, up to 50% ad valorem, collected 30 days after the proclamation. “Ad valorem” means a percentage of customs value. Gellert says the administration chose the statutory maximum without tying it to a measured burden. Legal commentators, including trade law professor Jennifer Hillman, argue the “offset” language requires tailoring the tariff to the harm. These are arguments, not holdings. [1]

Related article: Section 338 vs Section 301 vs Section 232 vs IEEPA, What Each Tariff Law Allows After the 2026 Supreme Court Ruling

What do Section 338(e) through (i) cover?

Subsection	General function
338(e)	Duties to address discrimination that benefits an industry in another foreign country
338(f)	Forfeiture of goods imported contrary to the section
338(g)	Directs the U.S. International Trade Commission (ITC) to monitor foreign discrimination and inform the president
338(h)	Treasury regulations to administer proclamations
338(i)	Defines “foreign country”

Section 338(g) matters because critics note the president does not appear to have relied on ITC fact-finding. Whether that is legally required is for the court.

What Happened Before the Section 338 Tariff Lawsuit Was Filed?

July 20, 2026: Proclamations 11046, 11047 and 11048

The administration invoked Section 338 on Canadian alcoholic beverages, dairy and motor vehicles, each at 50%. The Office of the U.S. Trade Representative cited provincial restrictions on U.S. alcohol, dairy-market access and Canadian motor-vehicle measures. [3]

August 18 to 22, 2026: Brief suspension, then tariffs take effect

The original August 19 effective date was suspended for three days. The tariffs took effect August 22, 2026. Estimates of the trade covered vary: Canada’s government cites about $27.6 billion in goods, while other analysts have used different figures. News coverage has described the tariffs as covering roughly 5% of Canadian imports.

September 8, 2026: Proclamations 11064 and 11065

The administration modified product coverage, adding items not previously listed, including cheeses Gellert imports. Collection on the new products began September 15, seven days later. That gap is the basis of the fourth count. [1][4][5]

October 20, 2026: Gellert sues

The complaint seeks a three-judge panel. Liberty Justice Center says it filed a motion for a preliminary injunction and summary judgment alongside it. No injunction, class certification or merits decision was verified as of October 21, 2026.

Which Canadian Products Are Affected by the Section 338 Tariffs?

The proclamations’ annexes, by Harmonized Tariff Schedule (HTS) classification, control coverage. According to the complaint, categories include cheese and dairy, certain alcoholic beverages, motor vehicles, furniture, plywood and wood products, hockey sticks and sporting goods, clothing, wigs, bags, beauty products, honey, seeds, plants and household goods. This list is illustrative, not a full tariff schedule.

Does the 50% tariff apply to every Canadian cheese?

Not necessarily to every cheese. The September amendments added broad cheese categories. Gellert says it imports more than 15 lines of Canadian cheese, including sheep’s-milk cheese, mascarpone, borgonzola, chèvre-style goat’s-milk cheese, brie and camembert, and imported about $71 million of Canadian cheese in 2025. [1]

Are CUSMA/USMCA-compliant goods exempt?

Canada’s Trade Commissioner Service says goods are not exempt from the Section 338 tariffs merely because they qualify for preferential treatment under CUSMA (called USMCA in the U.S.). Importers should check the specific classification and annex rather than assume. [6]

What Is the Difference Between Section 338 and Section 301 of the Trade Act of 1974?

Section 338 lets the president act on findings of foreign discrimination. Section 301 (19 U.S.C. § 2411 and following sections) authorizes the U.S. Trade Representative to respond to unfair foreign trade practices through investigations, consultations, notice and public participation.

Gellert argues Section 301 is the later, comprehensive framework and either superseded Section 338 by implication or controls when the conduct falls within it. Liberty Justice Center’s CEO has said there is a “very strong argument” that Section 338 was superseded, pointing to later laws such as the Trade Expansion Act of 1962. [2]

What does “implied repeal” mean?

A later statute can displace an earlier one without expressly repealing it, but courts disfavor this unless the laws conflict or the later one was meant to replace the earlier. The government can argue Congress never repealed Section 338 and that it remains a separate authority.

What Is the Constitutional Argument Against the Section 338 Tariffs?

Article I, Section 8 of the Constitution gives Congress the power to lay duties and regulate foreign commerce. Congress can delegate some authority, within limits.

• Major questions doctrine: Courts expect clear congressional authorization for sweeping economic powers. Gellert cites West Virginia v. EPA and the Supreme Court’s tariff ruling in Learning Resources, Inc. v. Trump. [1]
• Nondelegation doctrine: Congress must give an “intelligible principle” to guide delegated power. Gellert argues the administration’s reading would erase Section 338’s built-in limits: a finding of discrimination, an offset requirement and a 50% cap.

The government can respond that Section 338’s standards are adequate. A ruling could narrow the statute’s reading without striking down every possible use of it.

Why Does the Lawsuit Challenge the 30-Day Waiting Period?

Section 338(d) calls for duties to be collected 30 days after the proclamation. Proclamations 11064 and 11065 issued September 8, and collection on new products began September 15. Gellert argues collection should have waited until October 8.

The complaint alleges CBP collected more than $381,000 in Section 338 duties on qualifying cheese entries made between September 15 and October 7, 2026. It also says Gellert paid at least $520,538 across 22 cheese entries made between September 16 and October 11, 2026. These cover different periods and should not be added together. [1]

What Refunds Is Gellert Global Group Seeking?

• A declaration that Section 338 was impliedly repealed or is controlled by Section 301.
• A declaration that the tariffs exceed statutory authority, or that the statute is unconstitutional as applied.
• An injunction against collection and liquidation.
• Refunds with interest for Gellert and the proposed class, and at a minimum for the 30-day subclass.

These are requested remedies, not approved payments. If Gellert wins only on the 30-day issue, relief could be narrower than if the tariffs are invalidated entirely.

Who Could Be Affected by the Section 338 Tariff Lawsuit?

• U.S. importers of record: The proposed class covers importers that paid or will pay Section 338 duties on goods entered on or after August 22, 2026. The proposed 30-day subclass covers importers who paid duties on goods first listed in Proclamations 11064 or 11065 and entered September 15 through October 7, 2026. The class has not been certified.
• Canadian exporters: They may feel indirect effects, but are not automatically class members.
• U.S. farmers and suppliers: Gellert says one Canadian supplier buys milk from upstate New York dairy farms. That is an allegation, not a finding of industry-wide harm.
• Consumers: They may see higher prices, but consumers are not members of the proposed class and there is no consumer claim form.

For related consumer litigation over tariffs imposed under a different law, see IEEPA Tariff Consumer Class Actions, Were You Overcharged? Litigation Update.

Is the Section 338 Lawsuit the Same as the Earlier IEEPA and Section 122 Tariff Litigation?

No.

• IEEPA: In February 2026, the Supreme Court held in Learning Resources, Inc. v. Trump that IEEPA does not authorize the tariffs challenged there. Section 338 is a different statute, so that ruling does not automatically decide this case.
• Section 122 of the Trade Act of 1974: It allows temporary import surcharges for balance-of-payments reasons, limited to 150 days and a 15% rate. The administration used it after the IEEPA ruling. The CIT reportedly ruled against those tariffs, though collection continued while the case proceeds.
• Section 301: The administration has also used it for replacement tariffs, and challenges are pending.
• Section 232 of the Trade Expansion Act of 1962: Covers imports found to threaten national security.

For a separate consumer case over tariff costs, see GoPro Tariff Refund Class Action, Case No. 3:26-cv-11719. See also Walmart, Puma, Abercrombie & Fitch and Peloton Face Tariff Refund Class Action Lawsuits. Those cases involve different tariffs, claims and class definitions.

What Does Canada’s Retaliation Mean for the Section 338 Lawsuit?

Canada’s United States Surtax Order (2026), SOR/2026-186, took effect September 8, 2026, imposing surtaxes of 15%, 25% or 50% on listed U.S. goods. Canada says it responds to the Section 338 tariffs and other U.S. actions, and that its policies comply with the trade agreement. The White House says the U.S. action responds to discriminatory treatment of American exports. [7]

Gellert argues some Canadian measures targeted by the proclamations were responses to earlier U.S. tariffs, not discrimination of the kind Section 338 requires. The court has not decided that.

What Happens Next in Gellert Global Group Corp. v. Trump?

• Preliminary injunction: Gellert must show likely success on the merits, irreparable harm, a favorable balance of equities and consistency with the public interest. An injunction would not be a final ruling.
• Refunds: Possible only if the court finds duties unlawfully collected and refund relief is available. None has been ordered.
• Class certification: Requested under CIT Rule 23. Not verified as granted. The case should be described as a putative class action until certification.
• Government defense: The administration can argue Section 338 remains valid and that its findings satisfy the statute. Either side can appeal.

What Customs Laws Matter for Importers’ Refund Rights?

• Protests under 19 U.S.C. § 1514: A protest against a CBP decision, including duty assessments, generally must be filed within 180 days of liquidation. Missing it can limit refund options.
• Liquidation (19 U.S.C. § 1504): Entries generally liquidate within about a year of entry. Duties are finalized at liquidation.
• Interest (19 U.S.C. § 1505): Refunds of excess duties generally carry interest, as the plaintiff requests.
• CIT jurisdiction (28 U.S.C. § 1581(i)): The catch-all provision commonly used for challenges to tariff actions. Claims under it generally have a two-year limit (28 U.S.C. § 2636(i)).

Filing a class suit does not necessarily pause deadlines for other importers’ entries. Which route applies depends on each importer’s entries. Consult a licensed customs attorney or broker.

What Should U.S. Importers Do While the Lawsuit Is Pending?

1. Verify 8-digit HTS classifications against Proclamations 11046, 11047, 11048, 11064 and 11065.
2. Preserve records: CBP Form 7501 entry summaries, commercial invoices, bills of lading, origin documents and proof of duty payments.
3. Separate entries by date: August 22 onward for the broader class, and September 15 through October 7 for goods added September 8.
4. Calendar protest and liquidation dates for each entry.
5. Track the docket for Case No. 26-cv-04636 at the U.S. Court of International Trade.
6. Keep paying duties as required until an operative order changes your obligations.

There is no public consumer or importer claim portal for this case.

Key Dates in the Section 338 Tariff Act Canada Lawsuit

Date	Event
February 2026	Supreme Court decides Learning Resources, Inc. v. Trump (IEEPA)
July 20, 2026	Proclamations 11046, 11047 and 11048 issued
August 18, 2026	Three-day suspension of the tariff effective date
August 22, 2026	Section 338 tariffs take effect
September 8, 2026	Proclamations 11064 and 11065 expand product lists; Canada’s surtax order takes effect
September 15, 2026	Collection begins on newly listed products
October 8, 2026	Thirty days after September 8
October 20, 2026	Gellert files suit in the CIT
October 21, 2026	Research cutoff; no injunction or merits ruling verified

Frequently Asked Questions About the Section 338 Tariff Act Canada Lawsuit

What is Section 338 of the Tariff Act of 1930?

It is 19 U.S.C. § 1338. It authorizes additional duties of up to 50% ad valorem, and in some cases import exclusions, in response to specified foreign discrimination against U.S. commerce, with a 30-day waiting period before collection.

Why is Gellert Global Group suing the Trump administration?

It argues the 50% tariffs conflict with Section 301, exceed Section 338, raise a nondelegation problem and were collected too early on products added September 8, 2026.

Is the Section 338 tariff lawsuit a class action?

It is a putative class action. The complaint proposes a class of importers of record and a 30-day subclass, but no certification has been verified.

Can consumers claim a refund?

No. The proposed class covers importers of record that paid the duties, not retail shoppers. No consumer claim form exists.

Which Canadian products face the 50% tariff?

Products listed in the proclamations’ annexes, including certain alcohol, dairy, motor vehicles and items added in September such as cheese, furniture, plywood, apparel and sporting goods. Check HTS classification.

Does CUSMA/USMCA protect Canadian goods from these tariffs?

Canada’s Trade Commissioner Service says preferential treatment does not by itself exempt goods from the Section 338 tariffs.

Does the Supreme Court’s IEEPA ruling automatically invalidate Section 338 tariffs?

No. That ruling concerned IEEPA. The court must analyze Section 338 and these proclamations separately.

Can Gellert recover the more than $381,000?

It seeks a refund for duties allegedly collected before the waiting period ended. None has been ordered.

How long do importers have to file a customs protest?

Generally 180 days after liquidation under 19 U.S.C. § 1514. Confirm your deadlines with a customs attorney.

When will the court rule?

No decision date was verified. The case was filed October 20, 2026.

Official Sources and Court Records

1. U.S. Court of International Trade, October 20, 2026: Gellert Global Group Corp. v. Trump, No. 26-cv-04636, Complaint. Complaint
2. 19 U.S.C. § 2411 (Section 301): Statute
3. Office of the U.S. Trade Representative, July 20, 2026: Statement on Section 338 tariffs
4. Federal Register, Proclamation 11064: Proclamation
5. Federal Register, Proclamation 11065: Proclamation
6. Government of Canada, Trade Commissioner Service: U.S. tariff FAQ
7. Canada Gazette, September 23, 2026: United States Surtax Order (2026), SOR/2026-186
8. U.S. Court of International Trade: Court website

Legal authorities referenced: 19 U.S.C. § 1338; 19 U.S.C. § 2411; 19 U.S.C. §§ 1504, 1505, 1514; 28 U.S.C. §§ 1581(i), 2636(i); Trade Act of 1974 § 122; Trade Expansion Act of 1962 § 232; U.S. Const. art. I, § 8; Learning Resources, Inc. v. Trump; West Virginia v. EPA.

Disclaimer: This article is for informational purposes only and is not legal, financial or customs advice. The complaint contains allegations not resolved by a final decision. The proposed class has not been verified as certified, and no consumer refund program exists. AllAboutLawyer.com is a legal information website, not a law firm.

Researched and written by Israr Ahmad, legal content researcher and founder of AllAboutLawyer.com. All facts verified against the complaint in Gellert Global Group Corp. v. Trump, No. 26-cv-04636, the USTR announcement, Federal Register proclamations, the Canada Gazette order and the statutes cited, as of October 21, 2026. Last Updated: October 21, 2026.