Costco sues Trump administration, seeking refund on tariffs

WASHINGTON — Costco Wholesale Corporation filed a federal lawsuit challenging the legality of tariffs imposed by President Donald Trump under emergency powers, seeking a full refund of duties it has already paid and protection from an impending deadline that could jeopardize its claims.

The retailer’s complaint, filed in the U.S. Court of International Trade, argues that Trump exceeded his authority under the International Emergency Economic Powers Act (IEEPA) when he imposed sweeping tariffs earlier this year. The case follows similar legal challenges that have resulted in lower court rulings against the administration.

Costco argued it faces an urgent timeline because as of Dec. 15, under customs law, importers may lose their ability to recover refunds even if the tariffs are later found unlawful.

The lawsuit targets multiple executive orders issued by Trump starting in February that imposed tariffs on imports from Canada, Mexico and China based on declared emergencies over drug trafficking and trade deficits. One order imposed a 10% baseline tariff on nearly all U.S. imports and additional “reciprocal” tariffs ranging from 11% to 50% on 57 countries.

The complaint argues that IEEPA, enacted in 1977, does not mention tariffs and has never been used by any other president to impose them.

The Washington state-based retailer is seeking declarations that the tariffs are unlawful, an injunction preventing their enforcement against the company, and a full refund of all duties paid with interest.

Other companies like Bumble Bee Foods, EssilorLuxottica, Kawasaki Motors, Revlon and Yokohama Tire have filed similar lawsuits. 

Both the Court of International Trade and the U.S. Court of Appeals for the Federal Circuit have ruled that IEEPA does not authorize the president to impose tariffs. The Supreme Court heard arguments in related cases on Nov. 5.

During those arguments, a majority of justices appeared skeptical of Trump’s broad tariff authority. Justice Neil Gorsuch expressed concern about shifting too much congressional power to the president, calling it a “one-way ratchet toward the gradual but continual accretion of power in the executive branch”.

Chief Justice John Roberts questioned whether the emergency law allowed for tariffs on “any product, from any country, in any amount, for any length of time”.

Costco’s lawsuit emphasizes that even a favorable Supreme Court ruling in the pending cases would not automatically guarantee refunds for importers who have already paid the disputed duties. 

The Treasury has collected almost $90 billion from the import taxes imposed under the emergency powers law as of last month.