Costco sues Trump administration over sweeping use of emergency tariff powers | Trump tariffs
Costco is suing the Trump administration over its tariffs, arguing that the White House overstepped its executive authority in setting the tariffs and should be entitled to refunds if the tariffs are deemed unconstitutional.
In a lawsuit filed with the Court of International Trade last Friday, the retail giant argued that the Trump administration abused federal law, the International Emergency Economic Powers Act (IEEPA), to impose the tariffs.
Costco cited the law in the lawsuit, saying, “IEEPA gives the president certain authority, but that authority ‘may be used only to deal with an unusual and extraordinary threat declared a national emergency for the purposes of this section and for no other purpose.'” The largest U.S. warehouse club chain also noted that the law does not use the word “tariff” or any term of equivalent meaning.
In November, the high court heard oral arguments on Donald Trump’s tariffs, and justices on the conservative-majority court were skeptical of the White House’s claims that IEEPA covers Trump’s tariffs.
“The instrument is to tax Americans, and that has always been the primary power of Congress,” Chief Justice John Roberts said during arguments.
As the high court prepares to rule on tariffs in the spring, Costco said its case is urgent because importers are not guaranteed refunds for “illegally collected tariffs” even if the high court rules Trump’s tariffs are unconstitutional.
Customs and Border Protection (CBP) is the federal agency that collects tariffs, “liquidating” or finalizing the total amount of tariffs owed by an importer 314 days after the goods enter the country. Federal courts have warned that importers may not have the legal right to seek refunds of tariffs on liquidated goods; “even if the underlying legality of a tariff later turns out to be illegal”.
If too much time has passed since an importer paid the tariff, importers like Costco may not get a refund on the tariffs, even if the high court eventually finds the duties unconstitutional.
In addition to halting this liquidation, Costco is asking the international trade court to declare Trump’s tariffs illegal, stop collecting the duties, and provide a refund for any of the Trump tariffs Costco paid. CBP did not immediately respond to the Guardian’s request for comment.
Total tariff collection It rose to $195 billion in fiscal 2025, which ends in September, up from $118 billion in fiscal 2024, according to the Committee for a Responsible Federal Budget. Monthly customs duties increased from $7 billion in January to $30 billion in September.
Costco did not disclose how much it paid in taxes last year, but the company said one-third of its U.S. sales were imports from other countries, with nearly half coming from China, Mexico and Canada.
