The 50% US tariffs on Canadian goods now face their first court challenge aimed squarely at them. A New Jersey food importer, backed by the Liberty Justice Center, filed suit at the US Court of International Trade this week. Whatever the judges decide, the case is a reminder that trade policy can change the cost base of a business almost overnight.
What the lawsuit says
The tariffs rely on Section 338 of the Tariff Act of 1930, a provision that lets a president respond to countries judged to discriminate against US trade. The importer argues the provision has been superseded by later trade law and cannot be used this way. Cases like this take time, and the tariffs stay in place while it is heard.
The politics around it
The case lands two weeks before the midterm elections. Canadian sources quoted by the CBC do not expect a US and Canada trade deal before the vote, and the hedge fund founder Ken Griffin was reported this week calling tariffs on allies a disaster. On the other side, the administration has offered farmers $8 billion in aid, and talks with India are said to be close to a deal.
Which businesses feel tariffs most
- Importers and retailers that sell imported goods and cannot raise prices fast enough.
- Car makers, whose parts cross the US and Canada border several times. General Motors shares fell after its results this week.
- Food and drink businesses, from cheese importers to US wine exporters reporting lost business abroad.
- On the other side, US manufacturers that compete with imports can gain pricing power.
How tariff-linked portfolios have done
| Portfolio | 1 month | 3 months | 1 year | S&P 500, 1 year |
|---|---|---|---|---|
| American Reshoring & Industrial Renaissance Index15 companies | −0.4% | −3.0% | +22.1% | +14.4% |
| Mexico Friendshoring Index10 companies | +1.4% | −8.3% | +6.2% | +14.4% |
| Off-Price & Discount Retail Index9 companies | +8.7% | +4.8% | +12.0% | +14.4% |
| US Big Tech Index10 companies | −2.1% | +4.5% | +16.0% | +14.4% |
Prices up to 22 October 2026. Returns before each portfolio was made are simulated from real past prices, with no fees or taxes. Past performance is not a guide to the future.
As of 20 October our American Reshoring portfolio was up about 20% over a year, ahead of the S&P 500, while the Mexico Friendshoring portfolio, built on manufacturing moving to Mexico, was up only about 5%. Tariffs on neighbours cut both ways for nearshoring stories.
Looking at your own exposure
You cannot see tariff exposure from a company’s name. Look at where it makes things, where it sells, and whether its biggest costs cross a border. Arithmos covers the Toronto Stock Exchange as well as US markets, so you can compare Canadian companies directly.
Arithmos is a research tool. We do not predict court outcomes or trade policy, and nothing here is investment advice.
