10
Loading video...
By Rich Percival
Associate News Editor
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
Three former senior U.S. trade officials, including a key architect of the North American Free Trade Agreement, have urged a federal court to strike down President Donald Trump's 50 percent tariffs on Canadian goods, warning that the administration is relying on a law they argue has been superseded.
Carla Hills, who negotiated the original North American Free Trade Agreement (NAFTA), has joined two other former senior U.S. trade officials in calling for the tariffs to be struck down and refunds issued to American importers.
In a legal brief filed with the U.S. Court of International Trade on November 11, the trio argues that the administration bypassed safeguards established by Congress by invoking Section 338 of the Smoot-Hawley Tariff Act of 1930.
Read More on News
Trump Invokes Depression-Era Tariff Law
Section 338 authorizes tariffs of up to 50 percent on imports from countries found to discriminate against U.S. commerce under the conditions set out in the statute.
Unlike Section 301 of the Trade Act of 1974, it does not impose the same requirements for investigations, public consultation or discussions with the trading partner concerned.
The former officials argue that Section 338 was effectively superseded by Section 301 of the Trade Act of 1974, which provides a mechanism for challenging unfair foreign trade practices and includes requirements for investigations, consultations and public input.
Summing up their argument, the officials wrote: "Section 338 of the Tariff Act of 1930 is not dormant; it is dead."
The brief supports a lawsuit brought by Gellert Global Group, a New Jersey-based food importer whose companies have combined annual revenues exceeding $1.7 billion. The lawsuit challenges the additional tariffs on Canadian goods, and the Liberty Justice Center (LJC) represents the group.
...
Trump announced additional 50 percent tariffs on nearly $20 billion worth of Canadian imports on July 20, with the measures taking effect on August 22 after a three-day postponement. Affected products included wine, furniture, hockey equipment, clothing and machinery.
Canada announced retaliatory tariffs of 15, 25 and 50 percent on U.S. imports, including dairy products, steel, furniture and electronics. The measures took effect on September 8.
The U.S. and Canada are continuing trade negotiations, although relations remain strained by the tariffs and disagreements over the future of their trading relationship.
Hills served as U.S. trade representative under President George H.W. Bush from 1989 to 1993, during which she negotiated NAFTA.
The other signatories are Alan Wolff, a former deputy U.S. trade representative who drafted the initial version of what became Section 301, and Warren Maruyama, who served as general counsel to the U.S. trade representative under President George W. Bush.
The former officials also argue that the Supreme Court's recent restrictions on presidential tariff powers should apply to Section 338, citing the court's reluctance to interpret ambiguous statutes as granting sweeping authority over matters traditionally controlled by Congress.
Former Trade Officials Say Congress Intended Stronger Safeguards
The three, whose combined experience spans more than a century, argue that Congress deliberately introduced tougher safeguards to protect American businesses and consumers from the economic consequences of trade wars.
“The Executive Branch cannot treat existing laws like a menu, picking and choosing which version to enforce based on convenience or policy preferences,” their filing states.
They contend that nine successive presidential administrations, including Trump’s first, treated Section 338 as obsolete.
The former officials say the law fell out of use as America developed international trade agreements and more sophisticated ways of challenging unfair foreign practices.
The brief also references a classroom scene in the 1986 film Ferris Bueller's Day Off, in which a teacher discusses the Smoot-Hawley Tariff Act.
...
“The only conceivable purpose served by invoking Section 338 is to avoid the stronger procedural requirements of Section 301,” they argue.
The officials warn that the tariffs, affecting an estimated $20 billion in Canadian imports, could have consequences far beyond the two countries.
They argue that allowing the administration to invoke Section 338 would give it a "massive weapon" that could be used against other trading partners.
Such powers, they warn, risk “driving up prices for tens of millions of U.S. households” and weakening Congress's control over the president's ability to impose tariffs.
Sara Albrecht, chair and CEO of the Liberty Justice Center, told Newsweek: "Carla Hills, Alan Wolff and Warren Maruyama helped write and administer America’s trade laws. They know the difference between using those laws and exceeding them. Their participation strengthens our challenge by giving the court a valuable perspective on what these laws were designed to do and where presidential authority ends.
“Presidents have powerful tools to conduct trade policy. That does not give them the power to rewrite the rules. The administration can change the statute it invokes; it cannot change the requirement to stay within the law.
“The stakes extend beyond Canada. Businesses need to know that the rules governing their livelihoods cannot be rewritten by presidential decree. This is about the presidency, not the president. The limits we defend today must apply to whoever occupies the White House tomorrow.”
Lachlan Wolfers, a partner and national leader of KPMG Law in Canada, said: "The [Trump] administration is relying on a little-known, never-tested power in the face of a Supreme Court ruling that emphasizes the primary power of Congress to impose tariffs.
"If these tariffs are struck down by the Courts, you'll hear affected businesses cheering on both sides of Lake Ontario."
Officials Praise Trump's Earlier Approach to China
The former officials also praise the way Trump's first administration challenged China over unfair trading practices, highlighting the investigation and public hearings held before tariffs were introduced.
They credit former U.S. trade representative Robert Lighthizer with investigating China's practices and allowing American businesses to explain how the proposed tariffs would affect them.
The result, they say, was “a major U.S. trade action with broad support."
By contrast, they argue that Trump imposed tariffs on Canada without comparable procedural safeguards, triggering what the officials describe as a "major public and political backlash."
They also question whether Canada's trade restrictions meet the statutory definition of discrimination against U.S. commerce required to justify tariffs under Section 338.
While describing Canada’s dairy industry as “highly protectionist”, the officials point out that its restrictions generally apply to other countries too, rather than specifically targeting the U.S.
They also argue that American exporters secured more favorable treatment than many foreign competitors under the United States-Mexico-Canada Agreement (USMCA), negotiated during Trump's first term.
“The U.S. enjoys somewhat better treatment than most countries because of concessions secured by the Trump 1.0 Administration in the USMCA,” the filing states.
The officials also challenge Trump's use of Canadian tariffs on American cars and alcohol to justify his measures, pointing out that Canada introduced them in retaliation for earlier U.S tariffs.
...
“The U.S. can hardly complain that Canada imposed higher duties in response to punitive U.S. duties,” they say.
The officials argue that the administration failed to establish the extent of any harm caused to American businesses by Canada's trade policies before imposing the tariffs.
They also say importers were given just seven days' notice before additional products became subject to tariffs in September, rather than the 30 days they argue the law requires.
The White House maintains that its measures against Canada are needed to protect American businesses from unfair treatment.
The former officials warn that upholding the tariffs could give Trump and future presidents greater freedom to impose duties on other countries, potentially allowing administrations to reintroduce tariffs invalidated under other laws.
Despite the legal challenge, the former officials have not always been at odds with Trump’s trade agenda.
Wolff has also criticized Trump's use of tariffs, warning in an October 2025 speech that traditional checks on presidential trade powers were failing.
All three also supported a separate legal challenge in September to Trump's broader global tariffs, arguing that the administration was exceeding the authority granted to it under Section 301 of the Trade Act of 1974.
US and Canada Continue Trade Talks
Meanwhile, U.S Treasury Secretary Scott Bessent expressed optimism about reaching trade agreements with Canada and Mexico despite months of tariff tensions.
“I am optimistic that we can get trade deals with Canada and Mexico,” he told CNBC, without providing further details.
Canadian Foreign Minister Anita Anand said Ottawa would only agree to a deal that protected Canada's interests.
Speaking at the University of Oxford in England on Thursday, Anand said: "We will always negotiate in good faith.
“We will always negotiate professionally, protecting Canadian interests and Canadian sovereignty at every turn.”
The Trump administration has until December 11 to respond to Gellert's motion for summary judgment.
Newsweek has contacted the Office of the U.S. Trade Representative for comment.
Newsweek’s reporters and editors used Martyn, our AI assistant, to produce this story. Learn more about Martyn here.
Contact Newsweek editors on this story: Richard Percival and Rhian Morgan.
View 0 Comments
Submit Correction
View Editorial & AI Guidelines