US Puts 50% On Canadian Cheddar And Gouda Over A 6,376 Tonne Cheese Quota That Is Already 97% Full

I keep asking buyers one thing about this fight. What does winning it actually add? Named Canadian cheeses have paid a 50% US duty since 15 September. The quota rule behind it covers 6,376 tonnes. The trade filled about 97% of that last year.

What Washington charged, and when

Proclamation 11064 was signed on 8 September 2026 and published on 14 September. It took effect at 12:01 a.m. on 15 September. It added cheddar, Swiss, Parmesan, Gouda and other named cheeses to a 50% duty.

The duty itself is older. Washington set it on 22 August under Section 338 of the Tariff Act of 1930. It first hit whey, milk protein, lactose, casein and powders.

Cheese arrived through an order about alcoholic drinks. A second order the same day added cheese not made from cow's milk. Neither one reads like a cheese measure on the cover.

The rule behind the duty is a permit rule

Canada runs its cheese imports through quotas. Each trade deal carries its own. Who may hold a share of one differs by deal.

Under the Canada and EU deal, shops may hold a share. Under USMCA, they may not. Processors and traders hold that one instead.

The EU rules go further still. Since 2022, a tenth of that share is held back for new entrants. Large firms take a fifth of the rest and smaller ones take three tenths. No single holder may take more than a fifth of the quota.

Global Affairs Canada publishes the 2026 volumes. The USMCA cheese quota is 6,376 tonnes. The EU one is 16,000 tonnes. The WTO quota runs to 20,411 tonnes.

The quota is already full

This is the part the tariff coverage skips. Canada's cheese quotas were filled to about 97% in 2025. That holds across the WTO, EU, CPTPP and USMCA lines.

A full quota does not grow because the permit changes hands. Open it to shops and the tonnage stays at 6,376. Only the names on the paperwork change.

Who is suing, and what they want back

Gellert Global Group filed at the US Court of International Trade on 20 October. It asked the court to halt the duty three days later. The firm is a family food business in Elizabeth, New Jersey, trading since 1945.

Scale is the reason it can carry the fight. It handles more than 4,000 food lines from more than 60 countries. It works with over 1,000 approved plants. The duty costs it close to $40 million a year, by its own estimate.

It sells American cheese in Canada through its Canadian arm. It also buys Canadian brie made from upstate New York milk. The same firm loses on both sides of the border.

Its case runs on two points. The first is that a 1974 trade law replaced the 1930 one. The second is notice. Seven days were given, where the statute asks for thirty.

It wants the duty ruled unlawful and the money returned with interest. It has asked to bring the claim for other American buyers too.

The exposure runs the wrong way

Canada ships just over $80 million of cheese south each year. It buys around $400 million of US dairy. The smaller trade is the one Washington stopped.

Canada answered on 8 September with 25% on all US cheese. Washington went further on 29 September. Whey, molasses and non-alcoholic beer were barred from entry altogether.

One line in that order deserves a read. If a court strikes the ban down, the 50% duty applies instead. Winning the case does not reopen the border at zero.

What this means for the market

A sourcing book built on this duty may be undone by a court. Refunds with interest would change the landed cost after the fact. Buyers should model both outcomes now.

Three things decide the commercial case here. The first is who may hold a permit in each market. The second is how full that quota already runs. The third is who takes the US shelf while Canadian cheese is priced out.

European and other suppliers gain that space this quarter. Canadian makers need a second outlet for the same cheese. An entrant should price the permit rather than the tariff.

For makers and buyers, the decision now rests on one thing. How much of a market does a quota line really control? Our Global Cheese Database 2026 covers 39 cheese types across 48 markets in tonnes.