• Show Notes

Donald Trump has never lacked for litigation opponents. Democratic state attorneys general routinely gather by the dozen to sign onto lawsuits contesting his policies. Nonprofit advocacy groups base their present existence entirely on suing the President and his administration. Private civil claimants have accused Trump of everything from fraud to discrimination to sexual assault. Prosecutors indicted him four times. The only party more litigious than Trump’s opponents is Trump himself; the President has a long history of using (and often abusing) the legal process to go after everyone who glances sideways at him, from media outlets to his former employees to his own Executive Branch. Trump wins some legal battles, loses more of them, and seems to revel in the combat itself.

Yet when it comes to the president’s new tariffs on Canada, nobody has yet emerged to file a lawsuit that would have a genuine shot at success, potentially saving American companies and consumers tens of billions of dollars in the process.

Trump spent much of his late summer picking a bizarre trade (and cultural) war with one of our closest global allies. His gripe, in sum, is that Canada “has been ripping off the United States for decades” and that new U.S. tariffs on Canadian goods are necessary to even the scales. Canadian leaders have retaliated in action (imposing new tariffs of their own on U.S. goods) and words (“He has a lot of room to kiss my ass,” declared Ontario Premier Doug Ford).

You might sensibly be thinking: Didn’t the Supreme Court already reject Trump’s tariffs a few months ago? Well, yes and no. Yes, the Court did rule that Trump lacked authority under one specific law – the International Emergency Economic Powers Act – to impose his sprawling “Liberation Day” global tariffs. But the Court’s ruling did not categorically foreclose the President from ever imposing tariffs of any kind. And now he’s trying again (in various contexts), using different tariff laws.

Trump has now invoked Section 338 of the Tariff Act of 1930, which authorizes the president to impose tariffs up to 50 percent on any foreign country that places “unreasonable” tariffs on American goods, or that “discriminates in fact against the commerce of the United States” by levying higher tariffs on the U.S. than on other countries.

Consistent with his general disposition, Trump immediately cranked the meter all the way up, maxing out at the 50 percent statutory cap on a list of Canadian goods that is both staggering in its breadth and mind-boggling in its specificity. The new Section 338 tariffs apply to cars, alcohol, dairy products, timber, and clothing imported from Canada. But the list of affected Canadian products also includes: essential oils of grapefruit; ice hockey and field hockey equipment (except, for some reason, balls and skates); false beards and eyebrows; plastic statuettes; whalebone and whalebone hair; capes, cloaks, and anoraks; dog muzzles; gloves, mittens, and mitts “for persons other than men”; and, regrettably for all, prune wine.

Over its entire 96-year history, Section 338 has never been used, until now. We’re in blank slate territory here, both politically and legally.

The Trump administration’s argument is straightforward, at least on the surface. When it passed Section 338, Congress chose to delegate to the Executive Branch broad power to impose tariffs on foreign countries that discriminate by imposing higher tariffs on U.S. goods than on similar goods from other countries. Canada has in fact done that, even if partially in retaliation for a trade war started by the United States and, the argument will go, Trump accordingly is within the wide discretion granted to him by law to impose the new Section 338 tariffs.

But there also are substantial arguments to the contrary. The Trump administration never attempted to study or quantify the impact of Canada’s tariffs on the U.S., so the maxed-out 50 percent tariffs are neither calibrated nor proportionate to any damage done to U.S. interests. The Treasury Department never issued regulations around the new Canada tariffs, even though the law arguably requires them. The law itself is vague and could be an unconstitutional delegation of congressional power to the executive branch. A challenger could also argue that Congress intended to supersede and replace Section 338 by passing subsequent laws authorizing tariffs to address unfair trade practices (perhaps explaining why no president had used this particular law).

So why hasn’t anybody filed a lawsuit yet? It could be a simple cost-benefit calculation. Why would a small or mid-sized U.S. business invest the money, time, and attention necessary to sue the president and the federal government – especially when that case likely will carry all the way through the Supreme Court, with an uncertain result? And there’s a free-rider problem here. Our hypothetical business owner might rationally opt to sit out any lawsuit, knowing that he’d avoid litigation risk while still recognizing the full benefit if some other plaintiff takes up the mantle and succeeds in invalidating the tariffs.

And there could be an element of self-preservation at play. Wouldn’t a humble, hardworking American business owner think twice about becoming the top named plaintiff in a high-profile case targeted at one of the president’s favorite economic devices, the international tariff? Might there be some fear that the businessperson-turned-plaintiff might find himself the subject of a brand new IRS audit or DOJ investigation? Couldn’t our business owner opt to keep a low profile and stay out of the retributive crosshairs of the same president who has already indulged his base instinct for vengeance by purporting to rename Lake Ontario as Lake America?

We might see a new lawsuit at any moment. Thousands of American businesses stand to suffer economic harm, and would easily have standing to challenge the new tariffs on Canada in court. Still, it’s curious that nobody has chosen to step up and sue already, given the massive stakes. Maybe it’s only a matter of time. Or maybe it’s just not worth the risk to anyone who might consider tangling with the President in court.