Trump’s tariffs on Canada likely to face court challenge: lawyer

The White House said Section 338 of the Tariff Act of 1930 empowers the president to impose tariffs when a country puts U.S. exporters at a disadvantage relative to exporters in other countries — even though the law has never been used for that purpose.

U.S. officials said the measure is a response to provincial bans on U.S. liquor, Canada’s supply managed dairy system and quotas on certain U.S. vehicles.

Somin, along with the Liberty Justice Center, represented five American small businesses that were part of the legal challenge against Trump’s use of the International Economic Emergency Powers Act of 1977 for the so-called “Liberation Day” and fentanyl-related tariffs on Canada, Mexico and China.

In February, America’s top court concluded it was not legal for Trump to use the statute, known as IEEPA, because the U.S. Constitution very clearly gives Congress power over taxes and tariffs.

The president replaced those duties with a stopgap tariff statute — which also faced a legal challenge — before putting in place levies of 10 to 12.5 per cent on most nations around the world, citing forced labour in supply chains.

A coalition of U.S. states are challenging the use of Section 301 of the Trade Act of 1974 to hit the world with the forced-labour duties.

“There is this commonality in each case, there’s a power grab by the president to try to impose tariffs that Congress is not authorizing to do,” Somin said.

Like Trump’s use of IEEPA, Somin said using Section 338 usurps Congressional tariff authority and should be found illegal.

But that’s not the only issue that’s likely to come up in court. Somin said Section 338 is defunct because it was long ago superseded by other laws enacted in 1962 and again in 1974.

“The whole thing I think is simply no longer valid,” Somin said.

Another issue is that Trump’s tariffs don’t meet various requirements for invoking the law. The statute requires an investigation, Somin said.

The duties must also target tariffs that discriminate against U.S. goods relative to other countries. Somin said because of the Canada-U.S.-Agreement on trade, known as CUSMA, American goods get more favourable treatment in Canada.

U.S. tariffs must also be “offsetting” under the statute, but Somin said Trump’s actions have gone way beyond that by targeting a wide range of goods beyond dairy, automobiles and booze.

Ultimately the 338s hitting Canada “set a dangerous precedent,” Somin said. If Trump is able to play “fast and loose” with this statute, the president could be emboldened to hit other countries and industries with heavy tariffs, he said.

“The U.S.-Canadian trading relationship is actually extremely important, and further poisoning it is a bad thing for both countries,” Somin added. “So even if, hypothetically, this is somehow only limited to Canada, it’s still bad.”

This report by The Canadian Press was first published Aug. 26, 2026.

Kelly Geraldine Malone, The Canadian Press

by The Canadian Press

Trump’s tariffs on Canada likely to face court challenge: lawyer

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