Cheese Importer Sues Over 50 Percent Tariffs

Gellert Global Group is suing the Trump administration to end 50 percent tariffs on specific Canadian goods and recover the costs it has already paid. The company faces a $40 million tariff bill and argues the duties are unsustainable for its business.

The firm imports approximately $80 million US worth of Canadian cheeses annually. This inventory includes Celebrity goat cheese from Mariposa Dairy in Lindsay, Ontario, along with various brie and camembert products. CEO Thomas Gellert stated that the company is currently absorbing the tariff costs rather than raising prices for customers.

Gellert said consumers are fatigued by inflationary pressures and will not accept higher costs. He noted that the company tried to secure exemptions through meetings with American lawmakers and diplomats, including U.S. Ambassador to Canada Pete Hoekstra. During these discussions, he pointed out that American-produced milk is used in some of the affected cheese products, meaning the policy also hurts U.S. farmers.

Those lobbying efforts failed to yield results. With no trade deal in sight, Gellert decided to take legal action. He stated that the company does not have time to wait for the trade dispute to resolve itself naturally. The lawsuit was filed by the Liberty Justice Center, a non-partisan legal advocacy group.

The Liberty Justice Center previously challenged Trump's IEEPA tariffs, which the U.S. Supreme Court struck down earlier this year. Sarah Albrecht, the chair and CEO of the center, said the organization felt its work was incomplete if the president continued imposing illegal tariffs on different countries.

The tariffs were imposed after trade talks with Canada broke down in August. The administration applied the duties using Section 338 of the U.S. Tariff Act, also known as the Smoot-Hawley Act. This Depression-era law had never been used for tariff purposes before. It grants the president power to impose tariffs of up to 50 percent on goods from countries that discriminate against the U.S.

The administration argued that Canada retaliated against previous U.S. tariffs by banning American alcohol in certain provinces, protecting its dairy industry, and implementing measures in the auto sector. The Liberty Justice Center contended that Section 338 is not an all-purpose authorization for sweeping tariffs. The group argued there is a disconnect between the alleged discrimination and the specific products targeted.

The lawsuit claims the administration illegally rushed the implementation of the tariffs and that Trump lacks the authority to impose them in this manner. Albrecht stated that no president should pull a dormant statute from the shelf to impose sweeping bans without the limits Congress required. The tariffs initially applied to roughly $28 billion worth of Canadian goods, including cement, road salt, and hockey sticks.

The product list has been adjusted twice since the tariffs began. Some changes were requested by Republican Senator Susan Collins of Maine, who is facing a tough re-election race and sought exemptions for products vital to her state. Ryan Majerus, a trade lawyer at King & Spalding International Trade Group, said there is a good chance the tariffs could be reversed. He noted that the administration may struggle to link the specific Canadian actions to the targeted U.S. products.

Majerus added that the adjustments to the product list may undermine the administration's claim of discrimination. He said the courts have a blank canvas to determine how to view this authority. Gellert said his company must reassess its import strategy if there is no resolution by next year. He warned that losing shelf space would make it difficult to regain market position. Gellert stated that U.S. goat milk supply is insufficient to support demand, and existing factories lack the capacity to replace Canadian imports. He expressed personal responsibility for the Mariposa Dairy family, noting that if purchases stop, they will begin culling goats, a change that cannot be reversed.