Costco, one of the nation’s largest retail giants, is going to court — not for pricing disputes or contract claims, but to claw back potentially millions of dollars in tariffs it says were unlawfully imposed by the Trump administration. The warehouse club filed a lawsuit on Friday in the U.S. Court of International Trade, targeting what it claims are unconstitutional duties imposed under the International Emergency Economic Powers Act (IEEPA).
At the center of the case are tariffs levied under President Donald Trump’s controversial use of IEEPA, a Cold War-era statute intended for national emergencies — not, as critics argue, for bypassing Congress to unilaterally reshape international trade policy. Trump’s use of this authority introduced sweeping “reciprocal tariffs” on goods from several major U.S. trading partners, as well as so-called “fentanyl tariffs” on products from China, Canada, and Mexico.
Costco’s suit is not just about challenging the legality of those tariffs — that issue is already before the U.S. Supreme Court. Rather, the company is urgently seeking to preserve its right to a refund of the import duties it’s already paid, before a looming December 15 “liquidation” deadline locks in the charges permanently. Once liquidation occurs — the technical finalization of the tariff calculation — the chance for refunds becomes murky, if not entirely lost.
“This separate action is necessary,” Costco argued in its filing, “because even if the IEEPA duties and underlying executive orders are held unlawful by the Supreme Court, importers… are not guaranteed a refund… in the absence of their own judgment and judicial relief.”
This preemptive legal move reflects broader anxiety in the business community. Dozens of companies have filed similar suits, each aiming to keep open the legal pathway to recoup what could total hundreds of millions of dollars in import duties — particularly if the Supreme Court rules that Trump’s tariffs were unconstitutional.
The legal context is already stacked with precedent. In August, the U.S. Court of Appeals for the Federal Circuit upheld a lower court decision that Trump lacked the authority to impose the tariffs under IEEPA. In a 7–4 ruling, the court emphasized that the power to impose tariffs lies squarely with Congress. “Tariffs are a core Congressional power,” the court wrote, reinforcing that the legislative branch holds exclusive control over taxation and duties.
During oral arguments at the Supreme Court on November 5, several justices expressed skepticism toward the administration’s defense of Trump’s authority under IEEPA. The Court fast-tracked the case but has yet to announce when a final decision will be issued. In the meantime, companies like Costco are stuck in limbo — compelled to pay now, and possibly blocked from refunds later, depending on the technicalities of liquidation and judicial procedure.
The Trump administration, still defending the tariffs, has warned that a Supreme Court ruling against it could trigger massive refund obligations — a financial blow they say would be “enormous.” White House spokesman Kush Desai responded to Costco’s lawsuit, stating that the case “highlights the economic consequences of the failure to uphold President Trump’s lawful tariffs.” Desai added that the administration looks forward to a “speedy and proper resolution” by the Court.
Costco has yet to publicly comment on the case, but its legal filing reveals the high stakes at play. For now, the company — and countless others — face the very real possibility of permanent financial loss, unless the courts agree to intervene before the bureaucratic clock runs out.
