Demand for goat cheese produced at an independent dairy in Ontario could soon change the trade policy of the world’s largest economy.
A lawsuit against the Trump administration was filed in U.S. trade court this week by New Jersey-based food importer Gellert Global Group fighting the 50 per cent tariffs imposed on a wide variety of Canadian products.
At the heart of the suit, said Thomas Gellert, CEO of Gellert Global, is cheese produced by Mariposa Dairy in Lindsay, Ont., one of the largest goat cheese producers in North America. Between the goat cheese from Mariposa and the brie from another Ontario dairy, Gellert estimates he typically imports $80 million (U.S.) of Canadian cheese into the U.S. every year.
While he’s been paying the 50 per cent tariff since it was imposed in late August, Gellert says there’s a limit to how long his family-run firm can keep footing the bill.
“We haven’t had to lay anybody off, but we can’t afford to absorb this cost for a good length of time,” said Gellert, the third generation of his family to run the company.
Fighting the tariffs, imposed under a piece of 1930s legislation which has never been used — let alone tested in court — is something that was a matter of principle, said Gellert. Asked if he was concerned about the potential for retaliation from a White House which has shown a penchant for lashing out at perceived enemies, Gellert didn’t waver.
“What I’m concerned about are my employees, my customers, and my suppliers,” said Gellert. “We’ve got a great relationship with Mariposa Dairy. I’ve made personal commitments to that community.”
For Mariposa CEO Mark Anderson, seeing an American distributor stand up for a Canadian supplier is gratifying, especially when the Canada-U.S.-Mexico Agreement on trade has come under fire.
“Our investment in supplying the U.S. market is based on a strong CUSMA,” said Anderson. “Having someone from the U.S. stand up for that is great.”
Unlike cow’s milk, which the U.S. has in abundance, goat’s milk is in much shorter supply south of the border, Anderson added. So the tariff on goat cheese is cutting off their nose to spite their stomach.
“They don’t have enough goat milk to supply their own industry,” said Anderson. “They just can’t source this product from inside the U.S.”
And, said Gellert, trying to maintain that steady supply without spending more tariff money is something worth fighting for.
“As a business person you like predictability. Tariff threats that come and go create a lot of volatility,” said Gellert. “This impacts our ability to plan proactively.”
Trump issued 50 per cent tariffs against a wide range of Canadian goods effective in August using Section 338 of the 1930s Tariff Act, a Depression-era piece of legislation which has yet to be tested in court.
After Canada retaliated with dollar-for-dollar tariffs on some U.S. imports, Trump extended the tariffs to a wider array of products, and also imposed an import ban on most Canadian alcohol and dairy products.
The Brie, noted Gellert wryly, isn’t one of them, partly because it’s made in Canada with milk supplied by a U.S. dairy.
“They’re putting a 50 per cent tariff on a cheese made with American milk. I don’t know how that’s helping American farmers,” said Gellert, who took his frustrations with the tariff policy to government representatives, including U.S. Ambassador to Canada Pete Hoekstra.
Eventually, he decided to go to court, with the help of the Liberty Justice Center, a D.C.-based constitutional law think tank which was behind the successful legal fight against Trump’s so-called Liberation Day tariffs.
Liberty Justice CEO Sara Albrecht is confident this fight is winnable too.
“I’m very confident with the arguments we’ve put forth,” said Albrecht. “If Congress really wanted the president to have this broad authority, they would have … put guardrails on it.”
Even the Liberation Day tariffs imposed under the International Emergency Economic Powers Act were too broad and sweeping, according to U.S. courts, Albrecht noted. The current ones against Canada are even more so, she argued.
Also, the U.S. Congress subsequently passed other trade legislation laying out far more detailed steps a president needs to take before imposing tariffs, Albrecht argued, making the 1930s legislation moot.
And, said veteran international trade lawyer Barry Appleton, winning this case could tie Trump’s hands on trade policy tighter than ever.
“This is going to shape what’s going to come for the next two and a half years,” said Appleton, co-director of the Center for International Law at New York Law School, and a fellow at the University of Waterloo’s Balsillie School of International Affairs.
“I think this could significantly affect the shape of a future trade deal. And that could be more beneficial than anything we could get at the table.”
