Untested in court, Trump’s new tariffs on Canada raise legal questions
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President Donald Trump has invoked Section 338 of the Tariff Act of 1930 to impose 50% tariffs on approximately $20 billion in Canadian imports, a statute never before used or tested in court [citation:1]. The tariffs, effective August 22, 2026, target Canadian motor vehicles, alcohol, and dairy products, and apply regardless of USMCA eligibility [citation:10]. Legal scholars and trade lawyers argue the Depression-era law may have been superseded by the Trade Expansion Act of 1962 and the Trade Act of 1974, making it vulnerable to challenge [citation:1]. Ilya Somin, a law professor involved in the successful Supreme Court challenge to Trump's previous IEEPA tariffs, said a legal challenge is "overwhelmingly likely" [citation:3]. Canada has announced dollar-for-dollar retaliatory tariffs set for September 8, 2026 [citation:10]. The tariffs follow the collapse of last-minute negotiations and represent an escalation in the trade conflict between the two allies [citation:10].
Timeline
- 1930 — Congress passed Smoot-Hawley Tariff Act, including never-used Section 338.
- 1932 — US considered Section 338 against Spain but ultimately did not.
- 1949 — US considered Section 338 against Communist China but never used.
- 1962 — Congress passed Trade Expansion Act, arguably superseding Section 338.
- 1974 — Congress passed Trade Act, granting president tariff powers with limits.
- On July 20 2026 Trump invoked Section 338, imposing 50% tariffs on Canada.
- On August 18 2026 Trump paused tariffs for three days citing a deal.
- On August 21 2026 Canada suspended negotiations, tariffs set for next day.
- On August 22 2026 50% Section 338 tariffs took effect on Canadian goods.
- On August 22 2026 Canada announced retaliatory tariffs effective September 8.
- Legal challenges from industry groups and states are overwhelmingly likely.
- Courts may rule Section 338 obsolete or unconstitutional if challenged.
- US-Canada trade relations may remain strained for extended period.
Sources
International Economic Law and Policy Blog
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