Costco takes legal action against Trump administration for extensive use of emergency tariff powers

Costco has filed a lawsuit against the Trump administration, claiming that the imposition of tariffs exceeded presidential authority and that the company should be refunded if these tariffs are deemed unconstitutional. The case was submitted last Friday to the Court of International Trade.

In the filing, Costco argued that the administration misapplied the International Emergency Economic Powers Act (IEEPA), the federal law cited to justify the tariffs. Quoting the statute, Costco emphasized that IEEPA grants the president power only to address an unusual and extraordinary threat after a national emergency has been declared, and may not be exercised for any other purposes. The company also noted that the law does not mention tariffs or any equivalent term.

Earlier in November, the Supreme Court heard arguments concerning the legality of Trumps tariffs. Justices appeared doubtful that IEEPA provided the legal basis for the administrations actions. Chief Justice John Roberts remarked that imposing taxes has traditionally been a central power of Congress.

Costco stressed the urgency of its lawsuit, explaining that even if the Supreme Court rules the tariffs unconstitutional, importers might not automatically receive refunds. Customs and Border Protection (CBP) finalizes tariff amounts 314 days after goods enter the country, and courts have cautioned that importers may lack legal recourse for recovering tariffs already collected, even if later found unlawful.

The retailer is seeking a court order to halt the liquidation of tariffs, declare Trumps tariffs illegal, stop their collection, and secure refunds for any tariffs it has already paid. CBP has not provided an immediate comment.

Tariff revenue surged in fiscal year 2025, reaching $195 billion, up from $118 billion in fiscal year 2024, according to the Committee for a Responsible Federal Budget. Monthly collections increased from $7 billion in January to $30 billion in September.

While Costco has not revealed the total duties it has paid over the past year, the company noted that one-third of its U.S. sales involve imported goods, nearly half of which come from China, Mexico, and Canada.

Author: Ethan Caldwell