26.10.2026 Regulation #USA #Import #Duties

Food importer sues over US 50% Section 338 tariffs on Canadian goods

Food importer Gellert Global Group Corp., a New York corporation headquartered in Elizabeth, New Jersey, filed suit in the US Court of International Trade (CIT) on October 20, 2026, challenging the 50% duties on Canadian goods imposed under Section 338 of the Tariff Act of 1930. Liberty Justice Center represents the company and a proposed class of importers; motions for a preliminary injunction and for summary judgment were filed alongside the complaint. The court has not yet ruled.

The proclamations under challenge

The case, Gellert Global Group Corp. v. Trump, No. 26-cv-04636, targets three proclamations of July 20, 2026: 11046 (alcohol), 11047 (dairy) and 11048 (motor vehicles), each imposing an additional 50% duty on the goods in its annex (complaint, para. 1). After a three-day suspension under Proclamation 11056, the duties took effect on August 22, 2026 (para. 2). On September 8 Proclamations 11064 and 11065 expanded the lists: according to the complaint, the first added nearly every category of cheese to the alcohol list and the second added cheese of HTSUS subheading 0406.90.99 to the motor vehicles list, while the dairy proclamation does not reach cheese at all (para. 60). Cheese is classified under heading 0406.

The plaintiff's main arguments

Section 301 of the Trade Act of 1974 displaced Section 338; it requires an investigation, consultations and public comment, none of which took place (paras. 5, 45).
There is no discrimination for Section 338 to "offset." Canada's alcohol and auto measures, the complaint says, responded to US tariffs, and the dairy quotas were negotiated by the US itself under the USMCA; the 50% rate is not tied to any measured burden (paras. 7, 54-56).
The nondelegation doctrine is violated: as read by the administration, Section 338 lacks an "intelligible principle" constraining the President (Count III, paras. 102-103).
The 30-day waiting period was skipped: products were added on September 8, but collection began on September 15, seven days later (paras. 8, 112). A separate subclass is proposed to recover those payments.

For context, the complaint cites the Supreme Court's ruling of February 20, 2026 that the IEEPA tariffs were ultra vires (para. 26), the CIT's ruling on the Section 122 duties, now on appeal to the Federal Circuit (para. 30), and case No. 26-cv-03555 on the Section 301 duties, still undecided (para. 34).

Relief sought and the proposed class of importers

Gellert says it imports more than 15 lines of Canadian cheese and imported roughly $71 million of it in 2025; it puts its Section 338 duties at $40 million a year and paid at least $520,538 on 22 entries between September 16 and October 11 (paras. 62, 66-67). Shipments keep arriving through Alexandria Bay, Champlain and Detroit, and the duties continue to be collected on them (para. 68).

The plaintiff asks the court to declare the duties unlawful, enjoin their collection, including at liquidation of entries, and order refunds with interest (para. 10 and the prayer for relief). The class is defined as importers that have paid or will pay Section 338 duties on goods entered on or after August 22, 2026; the subclass covers payers on goods listed in Proclamations 11064 and 11065 and entered from September 15 to before October 8, 2026 (paras. 75-76). Class members, the complaint says, can be identified from CBP entry records, and the plaintiff estimates them at hundreds, if not thousands, of importers, since the duties reach goods from cheese to furniture and motorboats (para. 77). Administration officials, as described by Fox Business, call the tariffs a response to discriminatory Canadian trade practices; the article records no White House reply to its request for comment.

For importers of Canadian goods, the practical significance of the suit lies in its class nature: if the claims succeed, refunds with interest are sought for all payers of Section 338 duties since August 22, 2026, not only for the plaintiff.

Primary sources

Mentioned codes

0406

This material is for information only and does not constitute legal advice or customs consulting. Verify changes against the primary sources before acting.