In a significant legal challenge to former U.S. President Donald Trump's trade policies, wholesale giant Costco has filed a lawsuit against his administration. The company is demanding a full refund of tariffs it was forced to pay under Trump's use of the International Emergency Economic Powers Act (IEEPA).
The Legal Battle Over Tariff Authority
The lawsuit was filed in the U.S. Court of International Trade. Costco is not only seeking a "full refund" on all import duties collected under the act but also an injunction to stop future tariffs and a legal declaration that they are unlawful. The case, first reported by NBC News, cites previous rulings from the same court and the Federal Circuit that found these tariffs to be illegal.
Costco's central argument hinges on the alleged misuse of the IEEPA. The company contends the law, first enacted in 1977 and amended several times, is intended for use during an extraordinary threat that constitutes a national emergency. "The text of IEEPA does not use the word 'tariff' or any term of equivalent meaning," the lawsuit states. It further notes that the act has never been amended to authorize tariffs, nor has any other president used it to impose them.
Timing and Financial Stakes
This legal action comes as the U.S. Supreme Court is itself considering a decision on the legality of Trump's tariffs. Costco explains that its separate lawsuit is necessary because even if the high court strikes down the tariffs, companies are not automatically guaranteed a refund without pursuing their own legal judgment and relief.
While Costco's filing does not specify the exact financial hit from the tariffs, the stakes are substantial. A company executive revealed on an earnings call in May that approximately one-third of Costco's U.S. sales come from imported goods. The Trump administration reported that as of the end of October, it had collected $195 billion via tariffs—a figure about $100 billion less than the White House had originally projected.
Broader Implications for Trade
The lawsuit places a major corporate retailer directly at odds with the legacy of Trump's aggressive trade strategy. Costco's move could encourage other affected businesses to seek similar redress. At the time of the initial reports, neither Costco nor the White House had immediately responded to requests for further comment on the lawsuit or the specific refund amount being sought.
This case highlights the ongoing legal and financial reverberations of presidential trade actions. It questions the limits of executive power under national emergency statutes and underscores the significant costs borne by corporations—and ultimately consumers—in cross-border trade disputes.