Paul Wiseman, Associated Press
WASHINGTON (AP) — President Donald Trump has invoked a 96-year-old statute, Section 338 of the Tariff Act of 1930, to impose a 50% tax on $20 billion worth of Canadian imports. This action has led to retaliatory measures from Canada and has raised legal questions regarding the authority and implications of the tariffs.
The Section 338 tariff authority has not been previously tested in court. Ryan Majerus, a partner at King & Spalding and a former U.S. trade official, stated, "This law is literally a blank canvas because it's never been litigated." Legal experts are uncertain whether these tariffs could withstand a legal challenge, with some arguing that the Depression-era law may be outdated due to more recent trade laws.
The tariffs were implemented in response to alleged discrimination by Canada against U.S. dairy, auto, and alcoholic beverage exports. The 1930 tariff legislation, known as the Smoot-Hawley Act, was enacted during the Great Depression to protect American industries but is often criticized for exacerbating the economic downturn.
Section 338 allows the president to impose tariffs of up to 50% on imports from countries that discriminate against U.S. businesses. However, before Trump, no president had utilized this statute. Legal scholars Peter Harrell and Jennifer Hillman noted that Section 338 had been considered in past trade disputes but was never enacted.
As new trade laws emerged, some of which limited presidential tariff powers, legal experts argue that Section 338 may have been superseded. Sara Albrecht, CEO of the Liberty Justice Center, questioned why Congress passed the Trade Expansion Act of 1962 and the Trade Act of 1974 if they intended for Section 338 to remain in effect.
Critics of the Section 338 tariffs point out that the Trump administration did not quantify the damage caused by Canada’s trade practices against U.S. companies. They also highlight that Canada’s dairy market protections apply to multiple trading partners, not just the U.S., and that the U.S. had previously agreed to these terms in trade negotiations.
John Veroneau, former general counsel for the U.S. Trade Representative, defended the tariffs, stating they are justified when a country discriminates against U.S. imports. He noted that Canada’s retaliatory tariffs against U.S. products could also be seen as discriminatory.
The Supreme Court previously rejected Trump’s attempt to impose broad tariffs under a national security law, and a specialized trade court in New York has also dismissed subsequent tariff attempts. No lawsuits have yet been filed against the Section 338 tariffs, although the Liberty Justice Center is seeking plaintiffs.
The Section 338 tariffs affect a smaller portion of Canadian imports compared to previous tariffs, which may limit the number of companies able to claim injury. Albrecht expressed hope that the two countries might resume negotiations to resolve the trade standoff.
SOURCE: PBS NewsHour PUBLISHED: 2026-08-29 15:58:58