Costco Wholesale Club has filed suit with the United States Court of International Trade seeking a full refund of duties rendered if the U.S. Supreme Court strikes down tariffs imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA).
The move is Costco’s way of setting the grounds for restitution of tariffs paid if the Supreme Court finds the administration overstepped its authority under the IEEPA in enacting the duties imposed under policies set by President Donald Trump.
The complaint, filed November 28, states that, as a U.S.-based importer of merchandise subject to the challenged duties, Costco has been hit by tariffs beginning in February 2025 through a series of executive orders invoked under IEEPA. However, the complaint noted that the trade court and the U.S. Federal Circuit have held that IEEPA does not authorize the tariffs imposed and, so, the underlying executive orders that directed them are unlawful.
The Supreme Court is expected to rule on the lawfulness of the tariffs, and court observers at proceedings on the legality of the impositions noted that the justices expressed skepticism about the rationale for the administration’s actions under the IEEPA. However, Costco stated its separate action is necessary because, even if the duties and underlying executive orders are struck down, importers that have already paid, including Costco, are not guaranteed a refund for the tariffs charged under the administration’s actions, citing IEEPA. As such, Costco maintained that it is taking a necessary legal action because the tariffs paid could be subject to liquidation — which formally locks in the actual duty to be paid— that would qualify the company’s right to a complete refund. Costco added it intends to file a motion for a preliminary injunction to suspend liquidation. Once liquidated, the point when the government cashes in an imposed duty, the company subject to the tariff might not be able to recover what it was charged, even if the tariff is later found to be illegal.
Costco is asking the court for a declaration that the IEEPA duties are unlawful; an injunction preventing the administration from imposing further duties on it under the executive orders challenged in this lawsuit; and a full refund of all IEEPA-related duties the company has already paid as a result of the executive orders challenged by the lawsuit, as well as those it will continue to pay.
Tariffs have forced Costco to invest in a range of initiatives to balance the costs involved and the company’s ability to deliver value for its customers. In its fourth-quarter financial results conference call, Gary Millerchip, Costco executive vice president and CFO, said the company had been absorbing some tariff costs, making changes in sourcing, improving efficiencies as an offset and working with suppliers to mitigate the impact of duties and in some cases consolidating vendors in affected merchandise categories all in an effort to maintain low prices for members while minimizing any effect on margins.
