Canadian Counter-Tariffs Risk Undermining U.S. Legal Challenges to Trump Tariffs

MONTREAL, Oct. 08, 2026 /CourierPR/ -- By responding with counter-tariffs, the Canadian government risks undermining U.S. legal challenges to the most recent round of tariffs imposed by the Trump administration, according to an Economic Note published by the Montreal Economic Institute (MEI).

The MEI argues that the imposition of counter-tariffs by Canada is counterproductive.

The Trump administration initially imposed tariffs under the International Emergency Economic Powers Act, but the Supreme Court invalidated these tariffs in February 2026. The court ruled that the law does not allow the U.S. president to impose tariffs under this section, and the tariff power remains the prerogative of Congress. As a result, the U.S. government was ordered to refund $180 billion to American importers for tariffs collected illegally.

Rather than renouncing its tariff policy, the Trump administration sought to find another legal text to justify the tariffs. It found Section 338 of the 1930 Smoot-Hawley Tariff Act, a law known for having exacerbated the effects of the Great Depression. This section would allow the president to impose tariffs of up to 50 per cent on goods from a country whose trade practices discriminate against U.S. goods.

However, Magness argues that the Trump administration is confounding a trade deficit with a loss of money, an error that is unlikely to stand up in court.

The researcher notes that this section has never been invoked before, meaning that a lawsuit would be a first test for this legal tool. However, he also points out that this section has likely already been superseded by other trade laws adopted in the 1960s and 1970s. For example, the Trade Expansion Act of 1962 clarified what would count as a discriminatory trade practice for U.S. goods.

By imposing dollar-for-dollar counter-tariffs, the Canadian government could undermine this second argument, as these tariffs necessarily discriminate against U.S. trade, explained Magness.

Public opinion in the United States is highly unfavorable towards the new tariffs. According to an Ipsos poll conducted in September, 57 per cent of Americans oppose tariffs against Canada, while only 20 per cent support them. Another Economist/YouGov poll in August arrived at a similar conclusion, with 58 per cent of respondents opposed to the new tariffs versus 26 per cent in favor.

Companies, trade associations, and even U.S. state governments have already contested other Trump tariffs before the courts. The coalition that opposes these measures is large and powerful, according to the researcher.