Legal experts question viability of Trump's revived Section 338 tariffs on Canada
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The Trump administration has invoked a rarely used Depression-era law to impose up to 50% tariffs on Canadian goods, but scholars and lawyers say the authority has never been tested in court and may be superseded by later trade statutes.
The White House this summer invoked Section 338 of the 1930 Smoot-Hawley Act to levy tariffs of up to 50% on a range of Canadian imports, citing alleged discrimination against U.S. dairy, automobile and alcoholic-beverage exporters. The provision, which gives the president unilateral power to impose duties on countries that treat U.S. businesses unfairly, has never been used by a sitting president and has not been litigated.
Legal scholars note that the statute has lain dormant for decades. "Until Trump's second term, few trade lawyers were aware that Section 338 remained on the books or understood what it did," wrote Georgetown professors Peter Harrell and Jennifer Hillman. They point to historical State Department records showing the law was considered but never applied in disputes with Spain in 1932 and Communist China in 1949.
Subsequent trade legislation, including the Trade Expansion Act of 1962 and the Trade Act of 1974, granted the president tariff authority for specific situations such as national-security threats and unfair trade practices, while imposing procedural safeguards. "There is a very strong argument that (Section 338) was superseded," said Sara Albrecht, CEO of the Liberty Justice Center, a libertarian advocacy group that has represented businesses challenging earlier Trump tariffs.
Critics also argue that the Canada tariffs do not meet the statutory requirement to offset quantified harm. Harrell and Hillman note that the administration did not calculate the economic damage caused by Canadian policies and that the tariffs target products unrelated to the alleged discrimination, such as hockey sticks and cement. They add that Canada’s dairy pricing system, which the United States accepted in the earlier US-Mexico-Canada Agreement, applies to many trading partners, making the discrimination claim “incongruous.”
Former U.S. Trade Representative general counsel John Veroneau countered that Section 338 is straightforward: it applies when a foreign country taxes U.S. imports more heavily than it taxes other nations’ goods. He cited Canada’s retaliatory tariffs on U.S. products as an example of such discrimination and warned that courts would focus on whether statutory criteria are satisfied.
No lawsuits have yet challenged the Section 338 tariffs, and the Liberty Justice Center has struggled to find plaintiffs willing to sue the government. "I haven't had a lot of response from plaintiffs," Albrecht said, noting the difficulty of suing the federal government. The tariffs affect roughly 5% of Canadian imports, a smaller share than the broader 2025 worldwide tariffs the administration previously attempted.
Negotiations between the United States and Canada remain stalled, but Albrecht expressed optimism that a diplomatic resolution could end the dispute.