Costco has initiated a lawsuit against the United States government, seeking a full refund of import duties associated with tariffs imposed during the Trump administration. This legal action comes as the Supreme Court is reviewing the President's authority to levy such tariffs, with lower courts having previously ruled against the administration's use of emergency powers. Costco aims to secure a refund should the Supreme Court determine these duties to be unlawful.
Legal Background and Court Proceedings
The dispute centers on tariffs implemented under the International Emergency Economic Powers Act (IEEPA). Two lower courts have previously ruled that the Trump administration exceeded its authority by utilizing emergency powers for these tariff impositions. In May, the U.S. Court of International Trade first ruled the tariffs unlawful, a decision later upheld by the U.S. Court of Appeals.
During a Supreme Court hearing last month, justices reportedly questioned the president's authority to impose these levies without congressional consent. Lawyers representing the Trump administration have contended that emergency powers under the IEEPA grant the president the authority to impose global tariffs. The administration has warned that an unfavorable ruling could restrict future negotiation capabilities with other countries and result in the loss of billions of dollars already collected by the Treasury.
Costco's Rationale for Legal Action
Costco filed its lawsuit with the U.S. Court of International Trade, arguing for a declaration that the tariffs are illegal. The company cited adverse effects on its business due to the tariffs. Costco expressed concern about securing refunds even if the Supreme Court affirms the previous lower court rulings, with legal representatives stating that a "separate action is necessary" to guarantee a refund. The suit was filed ahead of a December 15, 2025, deadline, after which recouping funds would become more challenging. The retailer has not disclosed the specific amount it seeks or has paid in tariffs.
Broader Context and Industry Impact
Costco joins numerous companies from various sectors, including Revlon, Bumble Bee, and Kawasaki, that have filed similar lawsuits seeking refunds. Marc Busch, a trade law expert at Georgetown University, observed that while smaller companies initially led these legal challenges, larger corporations are now participating. U.S. customs data indicates that importers have collectively paid approximately $90 billion in IEEPA-related tariffs as of late September. In May, Costco executives reported that approximately one-third of products sold in the U.S. are sourced internationally, predominantly non-food items.