President Donald Trump just pulled a 96-year-old law out of the dusty archives to launch a massive trade war with Canada, slapping a heavy 50% tax on billions in imports. It is a bold move, but it is standing on shaky legal ice.
The administration is using Section 338 of the Tariff Act of 1930—a relic from the Smoot-Hawley era that has literally never been used by any president in history. Because it has never been litigated, trade attorneys call it a blank canvas. But that blank canvas is about to get shredded by federal courts.
If you are wondering whether these new tariffs will survive a courtroom battle, the short answer is no. Here is why this executive action is colliding head-on with constitutional reality.
The Resurrection of a Dead Statute
To target Canada over disputes involving dairy quotas, automotive caps, and provincial liquor bans, the White House bypassed modern trade frameworks and reached back to the Great Depression. Section 338 of the 1930 Tariff Act lets the president impose up to 50% tariffs on countries discriminating against U.S. goods.
Sounds simple, right? Except trade scholars and constitutional lawyers point out a massive flaw. The law has effectively been dead for decades.
After the 1930s, Congress passed modern legislation like the Trade Expansion Act of 1962 and the Trade Act of 1974. These newer acts gave presidents specific, narrow powers to handle trade imbalances and national security threats, but they also baked in strict procedural guardrails. They required formal investigations, public hearings, and clear statutory triggers.
Section 338 lacks all of these modern constraints. Legal experts argue that Congress implicitly superseded the old statute when it wrote newer, comprehensive trade laws. If a president could simply unearth a 1930s statute to bypass modern trade law, Congress's authority over commerce would mean nothing.
The Supreme Court Precedent Hanging Over the White House
The courts are already tired of executive overreach on trade. Back in February, the U.S. Supreme Court struck down Trump’s attempt to use the 1977 International Emergency Economic Powers Act (IEEPA) for broad global tariffs. The high court made it crystal clear: the U.S. Constitution gives Congress the power to levy taxes and tariffs, not the executive branch.
When that emergency power failed, the administration tried a stopgap measure, which a specialized trade court in New York promptly swatted down too.
Now, the Section 338 tariffs on Canada are following the exact same playbook. They represent another unilateral power grab by the White House to bypass Capitol Hill. Constitutional law professor Ilya Somin notes that the odds of these duties landing in federal court are practically guaranteed. The only real question is which industry groups or coalition of states will file the first complaint.
Why Finding Plaintiffs Is Actually Hard
You might expect American companies hit by retaliatory Canadian duties or importers facing the 50% tax to rush to the courthouse. They aren't doing that yet.
Filing a lawsuit against the federal government is expensive, grueling, and risky for any business that relies on regulatory goodwill. Organizations like the Liberty Justice Center have been actively looking for corporate plaintiffs willing to challenge Section 338, but it is a tough sell.
Furthermore, these specific tariffs cover roughly 5% of total Canadian imports—a much smaller pool than the sweeping global duties attempted in 2025. Because fewer companies are directly stung, the pool of potential plaintiffs willing to stick their necks out is tiny.
What Happens Next in the Trade War
Ottawa has already responded with dollar-for-dollar retaliation, deepening the chill between longtime allies. Meanwhile, American consumers and border communities are bracing for higher prices on energy, vehicles, and food.
The legal challenge is coming. Whether it arrives via a coalition of states or an alliance of small businesses, Section 338 will soon face a federal judge. Given the Supreme Court's recent defense of congressional authority, this 96-year-old ghost from the Smoot-Hawley era is unlikely to survive contact with the modern judiciary.
If your business relies on cross-border supply chains, do not wait for a court ruling to save your margins. Audit your exposure to Canadian imports immediately, explore alternative suppliers outside the current tariff zones, and consult customs counsel to see if you qualify for any narrow exemptions while the litigation winds its way through the system.
