Costco has joined a legal battle against the U.S. government to secure reimbursement for tariffs they have been compelled to pay if the U.S. Supreme Court rejects President Donald Trump’s claim of broad authority to levy tariffs.
The membership-based retail giant, known for selling a wide range of products from groceries to electronics, lodged a complaint last Friday in the U.S. Court of International Trade in Manhattan. The filing highlighted the uncertainty faced by businesses in reclaiming overpaid sums due to Trump’s use of the International Emergency Economic Powers Act to impose tariffs.
Legal expert Brent Skorup from the Cato Institute mentioned that the lack of clarity on potential refunds has led many companies to take legal action at the trade court to position themselves for potential reimbursements.
Trump contends that he holds nearly unrestricted power to impose tariffs, a power constitutionally designated to Congress under the 1977 International Emergency Economic Powers Act (IEEPA). However, he has already faced two court defeats on this issue.
According to trade lawyer Tim Meyer, if Trump’s tariff imposition is deemed unlawful, Costco stands a strong chance of securing a refund before the U.S. International Trade Court. The key factor would be whether Costco has fulfilled the necessary legal requirements to claim a refund.
Concerned about the impending liquidation of tariff bills by U.S. Customs and Border Protection starting December 15, Costco emphasized the urgency of reclaiming funds now to safeguard its entitlement to a complete refund.
With its substantial $275.2 billion in revenue for the fiscal year ending August 31, Costco’s involvement adds weight to the numerous companies, including Bumble Bee Foods, EssilorLuxottica, Kawasaki Motors, Revlon, and Yokohama Tire, also pursuing potential refunds through legal action.
Meyer, who also serves as a professor of international business law at Duke University, indicated that a favorable outcome for Costco could trigger a wave of similar lawsuits seeking substantial refunds.
During recent Supreme Court oral arguments, justices expressed doubts about the legality of Trump’s use of emergency powers to impose tariffs. While the case is under accelerated review, a ruling date has not been disclosed yet.
Costco has taken proactive measures to address tariff challenges, such as streamlining suppliers, emphasizing local sourcing, and promoting its in-house Kirkland brand.
