Last year, as faithful readers will recall, the president of the United States went haywire and imposed new tariffs on Canada by unilateral fiat. And while other commentators were endlessly analyzing Canadian trade strategy and U.S. electoral politics, I was reading treatises by crazy American libertarian lawyers and asking the question “Can he actually do that?” The answer , once it got to the Supreme Court, turned out to be “no, mostly,” with a 6-3 finding against the president.
The right thing to do, all along, had been to look at, to, and into American law. Most reporters and columnists like to seize upon the personal aspects of a political issue, rather than plunge into anything slightly technical, and the ones in Canada are widely guilty of making the dozy, repeatedly falsified assumption that U.S. courts will automatically do whatever Trump wants. (Of course, lots of writers south of the border make this mistake too.)
All this is why my spider-sense tingles as I talk to Canadians in 2026 about President Donald Trump’s latest fit of total absence of mind: namely, his use against Canada of Section 338 of the Tariff Act of 1930 (the eternally controversial “Smoot-Hawley” law). This is a long-forgotten provision that explicitly allows the president to unilaterally impose tariffs up to 50 per cent in cases where a foreign country discriminates unreasonably against American products. The delegation of Congressional tariff power in the text is quite unconditional, and everyone in Canada I have discussed the new trade battle with seems to have gloomily concluded that the Supreme Court and the libertarian zanies aren’t riding to our rescue this time.
Why I say that Section 338 was “forgotten” before Trump swept to power in 2016, I’m not kidding around. Trump’s election sent trade lawyers scrambling to anticipate moves he might make to start trouble without having to go through Congress. John Veroneau, a former deputy U.S. trade representative, and his associate Catherine Gibson wrote a short article pointing out the existence of Section 338 , which had never actually been invoked.
Their piece remains the canonical history of the section, and it describes how the FDR and Truman administrations very occasionally used Section 338 to frighten counterparties in trade negotiations. No tariffs were ever actually introduced under s. 338 before August 22 of this year. After 1949 the section remained on the books, but in a rapidly globalizing world where professionally negotiated multilateral trade deals looked like the future, it fell entirely out of official digests and textbooks of trade law. Trump’s White House might not even have known of Section 338 if not for Veroneau and Gibson’s spadework (dammit).
So what do the wild-eyed free-traders say? They definitely have a harder case than they did in opposing the International Emergency Economic Powers Act (IEEPA) tariffs of 2025, but Section 338, never before invoked, has never been tested in any court. In June, Philip Zelikow, a Hoover Institution historian-lawyer, staked out the position that most of Section 338 was repealed implicitly by later statutes allowing the president to take tariff action under the same circumstances, but with more procedural requirements. That explains why the provision was so thoroughly forgotten: it was forgotten because no one at all imagined it was still in effect.
Last month, two Georgetown trade lawyers offered a different array of potential challenges to Trump’s use of Section 338 — angles they say are likely to encourage the courts to circumscribe his trade war, though perhaps not negate it altogether. The section gives the president authority to “offset” the effects of other countries’ discriminatory trade policies up to the 50 per cent limit. But Trump isn’t doing anything of the kind. His claim is that Canada’s discriminating against the U.S. when it comes to automobiles, booze and dairy products; that makes his included tariffs on other products like Canadian hockey sticks and cement (and orchids and statuettes and pliers ) prima facie illegal. And even when it comes to the directly relevant sectors, the math doesn’t add up: his tariffs on motor vehicles alone will massively outweigh the White House’s own estimate of the costs of Canada’s retaliatory tariffs on the U.S. auto industry.
Perhaps the greatest legal weakness within Trump’s 2026 trade blast is one that may already have occurred to you: the government of Canada isn’t doing jack squat, by anyone’s account, to discriminate against American alcohol. As the Georgetown duo have noticed, because they pay some attention to the Canadian Constitution as well as the American one, liquor regulation is a provincial matter, and only some of the Canadian provinces have been boycotting U.S. alcohol products, doing so as commercial buyers .
Section 338 says that the president can strike back against actions by foreign countries that discriminate against the U.S. at the border. Since a delegation of Congressional power is likely to be read as narrowly as possible (even if it still applies), it is unlikely that a choice by some provinces not to buy the usual amount of Old Grand-Dad and Thunderbird will be allowed to serve as the pretext for unlimited, poorly quantified presidential retaliation. “Can he actually do that?” I guess we’ll see!
National Post
