Three months after the United States imposed 50 percent tariffs on a wide range of Canadian goods, the fallout in Wisconsin is landing unevenly. A trip to the lumber store costs noticeably more for home builders and cabinet makers. Furniture and packaging companies are absorbing higher input costs on wood products that used to cross the border without much friction.
Large employers like Harley-Davidson, Kohler, and Milwaukee Tool have the trade staff to manage it. Smaller operations mostly don’t, and they’re stuck either eating the cost or passing it to customers, which tends to mean delayed hiring and postponed equipment purchases rather than anything more dramatic.
The tariffs took effect August 22, hitting roughly $20 billion worth of Canadian goods including autos, alcohol, dairy, and forestry products, with no exemption for anything that would otherwise qualify under USMCA. Canada answered September 8 with its own list, covering a similar dollar range of U.S. exports at rates between 15 and 50 percent, and it specifically targeted Wisconsin cheese alongside roughly 700 other U.S. products.
The administration revised the scope again on October 23: plywood, certain paper products, some machinery and refrigeration equipment, and packing crates came off the list, while valves, carpets, and waste products went on, effective October 30. The White House has framed each adjustment as fine tuning in response to Canada’s own conduct, including a retaliatory package Ottawa rolled out after what the administration describes as Canada walking away from a near final trade agreement over the summer.
Not everyone in Wisconsin is losing. Some small businesses have actually picked up market share as buyers look for alternatives to Canadian suppliers, with domestic products like Wisconsin whiskey cited as one example of a substitute gaining ground. Roughly 28 percent of the state’s goods exports, about $7.5 billion worth, go to Canada, which remains the state’s largest trading partner by a wide margin, so there’s a lot of room for this to keep cutting in both directions depending on the product and the company.
What has changed since we last checked in is the legal picture. On October 20, Gellert Global Group, a U.S. importer of Canadian products, filed what’s being described as the first court challenge to the Section 338 tariffs, in the U.S. Court of International Trade. The complaint makes four separate arguments, and they’re worth knowing in plain terms because trade lawyers had been predicting a suit like this since the tariffs first took effect.
The first argument is that the 1930 statute the administration is using, Section 338, has effectively been superseded by Section 301 of the Trade Act of 1974, a newer and more specific law covering the same ground.
The second is that even if Section 338 still applies, these tariffs exceed what it actually authorizes, since Gellert argues Canada’s conduct wasn’t discriminatory in the way the statute requires and a 50 percent rate doesn’t correspond to any measurable harm it’s supposed to offset, a claim that also invokes the major questions doctrine courts have used elsewhere to rein in broad executive actions.
The third argument is a fallback: if Section 338 does authorize this, then the statute itself hands the president too much power without enough guardrails from Congress, a nondelegation problem. The fourth is narrower and procedural, that duties on goods added to the list in the September proclamations were collected before the required 30 day waiting period had actually run.
Gellert is asking the court to certify a class covering any importer that has paid Section 338 duties on Canadian entries made on or after August 22, and it wants the tariffs declared unlawful, their collection enjoined, and refunds issued with interest. The case is pending, with no ruling yet, but it’s the development that turns this from a wait-and-see question into one with an actual docket number attached.
Whether this is the end of the legal exposure trade lawyers flagged back in August or just the opening round, and whether October’s revision to the product list is the administration’s last word on scope, are now the two things worth watching together into the new year.