Trump's Canada Tariffs Rely on Untested 1930s Law, Raising Legal Vulnerabilities
President Trump invoked a 96-year-old statute to impose 50% tariffs on Canadian imports, but trade lawyers say the Depression-era law has never been litigated and may have been superseded by newer trade statutes.
What happened
Trump invoked Section 338 of the Tariff Act of 1930 to impose a 50% tax on $20 billion worth of Canadian imports, citing alleged Canadian discrimination against U.S. dairy, auto, and alcoholic beverage exports. Canada retaliated with dollar-for-dollar tariffs. Section 338 has never been used by any president before Trump and has never been tested in court. The statute, enacted during the Great Depression and known as part of the Smoot-Hawley Act, grants the president power to impose tariffs up to 50% on imports from countries discriminating against U.S. businesses. The U.S. considered using Section 338 against Spain in 1932 and Communist China in 1949 but never did, and the provision has sat largely dormant for nearly a century.
Context
The Section 338 tariffs face multiple legal challenges. Trade lawyers argue the statute was likely superseded by later trade laws, including the Trade Expansion Act of 1962 (allowing national security tariffs) and the Trade Act of 1974 (targeting unfair trade practices). Critics note that Section 338 only authorizes tariffs that 'offset' calculated harm, yet the Trump administration applied tariffs to goods unconnected to the disputed sectors and made no damage calculation. Additionally, Canada's dairy protections apply to multiple trading partners, not just the U.S., and were agreed to in the trade pact Trump himself negotiated in his first term. Trump's earlier tariff efforts have already floundered in court: the Supreme Court invalidated his national security tariff on nearly all countries in February. The lack of a clear plaintiff means legal challenges may be slow to develop, and courts would need to determine whether statutory requirements are met.
What's disputed
Whether Section 338 was superseded by newer trade laws; whether Canada's trade practices constitute discrimination specifically against the U.S.; whether the Trump administration's damage calculations satisfy statutory requirements; whether the tariffs on unrelated goods (hockey sticks, cement) are justified under Section 338's scope.