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Trump's 50 percent tariffs on Canadian goods, warning that the administration is relying on a law they argue has been superseded.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. 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The former officials argue that Section 338 was effectively superseded by Section 301 of the Trade Act of 1974, which provides a mechanism for challenging unfair foreign trade practices and includes requirements for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. 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.
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