President Trump recently invoked Section 338 of the Tariff Act of 1930 to impose a 50% tariff on $20 billion in Canadian imports, citing alleged Canadian discrimination against U.S. dairy, auto, and alcoholic beverage exports. The move prompted retaliatory measures from Ottawa and strained relations between the two neighbors.
The Section 338 authority, rooted in the Depression-era Smoot-Hawley Act, has never been used or litigated. Legal scholars and trade experts have raised substantial questions about whether the tariffs would survive judicial review. According to legal experts Peter Harrell and Jennifer Hillman of Georgetown University, Section 338 may have been superseded by more recent trade legislation passed after the Great Depression, including the Trade Expansion Act of 1962 and the Trade Act of 1974, which gave presidents tariff authority under different circumstances with specific procedural requirements.
Critics of the tariffs point to several potential legal vulnerabilities. They argue that the Trump administration failed to calculate the specific dollar amount of harm caused by Canadian trade practices, as the statute requires. Additionally, the tariffs target Canadian products unrelated to the disputed sectors, such as hockey sticks and cement. Legal scholars also contend that Canada’s dairy protections do not discriminate solely against U.S. farmers but apply to multiple trading partners, and that the United States itself agreed to these Canadian policies in a trade agreement negotiated during Trump’s first term.
Defenders of the Section 338 authority argue it provides straightforward presidential power when another country taxes U.S. imports more heavily than imports from other nations. John Veroneau, a former trade official, noted that courts will likely focus on whether statutory requirements are technically met, regardless of broader context. The legal outcome remains uncertain, as the statute has never been litigated and its modern applicability is contested among legal experts.
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