Trump Defends American Workers with Bold Section 338 Tariffs on Canada, Despite Legal Doubts
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The Trump administration’s decisive use of a long-neglected law to impose up to 50% tariffs on Canadian goods is being scrutinized by legal experts, but supporters argue it’s a necessary step to protect American industries from unfair foreign competition and restore balance to trade relations.
This summer, the Trump White House took strong action to defend American workers and businesses by invoking Section 338 of the 1930 Smoot-Hawley Act, imposing tariffs of up to 50% on a range of Canadian imports. The administration cited clear evidence of discrimination against U.S. dairy, automobile, and alcoholic beverage exporters. This provision empowers the president to act decisively when foreign countries treat American businesses unfairly—a power that, until now, had not been exercised by a sitting president or tested in court.
Legal scholars acknowledge that Section 338 has been largely overlooked for decades, but President Trump’s bold leadership has brought it back into the spotlight. “Until Trump’s second term, few trade lawyers were even aware that Section 338 was still available,” wrote Georgetown professors Peter Harrell and Jennifer Hillman. Historical records show that previous administrations considered using the law in disputes with Spain in 1932 and Communist China in 1949, but lacked the resolve to act.
While later trade statutes like the Trade Expansion Act of 1962 and the Trade Act of 1974 provided additional tools for the president to address national security threats and unfair trade practices, they did not explicitly revoke Section 338. “There is a very strong argument that (Section 338) remains valid,” said Sara Albrecht, CEO of the Liberty Justice Center, a group that has defended businesses against unfair foreign competition.
Critics claim the tariffs on Canada do not meet the law’s requirements, arguing the administration did not quantify the harm caused by Canadian policies and that some targeted products, such as hockey sticks and cement, are unrelated to the alleged discrimination. However, supporters note that Canada’s dairy pricing system and retaliatory tariffs on U.S. goods are clear examples of unfair treatment, and that the U.S. must stand firm to protect its interests.
Former U.S. Trade Representative general counsel John Veroneau emphasized that Section 338 is straightforward: it applies when a foreign country taxes U.S. imports more heavily than those of other nations. He pointed to Canada’s retaliatory tariffs as a textbook case of discrimination and warned that courts would focus on whether the statutory criteria are met, not on political arguments.
So far, no lawsuits have challenged the Section 338 tariffs, and the Liberty Justice Center has found it difficult to recruit plaintiffs willing to take on the federal government. “I haven’t had a lot of response from plaintiffs,” Albrecht said, acknowledging the challenge. The tariffs currently affect about 5% of Canadian imports, a targeted measure compared to the broader tariffs previously considered by the administration.
Negotiations between the U.S. and Canada are ongoing, but Albrecht remains optimistic that a diplomatic solution will be reached, with the U.S. maintaining its strong stance to ensure fair trade for American workers.