Costco sues over Trump's tariffs in a bid to secure a refund

[Thiệu Ngô]

Costco filed a lawsuit to recover tariff payments imposed by the Trump administration.
The retailer challenged tariffs enacted under the International Emergency Economic Powers Act.
Costco is seeking a full refund of duties paid.

By Katherine Li

Costco is suing the government to recover tariff money.

The wholesale retailer has filed a lawsuit against the United States, the US Customs and Border Protection agency, and Rodney S. Scott, the Commissioner of US Customs and Border Protection.

The suit asks the US Court of International Trade to strike down tariffs imposed by President Donald Trump by executive order under the International Emergency Economic Powers Act, and to ensure tariff refunds for businesses that paid import duties.

In a complaint submitted Friday, November 28, the retailer said it is seeking a "full refund" of duties it paid after Trump used the emergency-powers law to levy what he described as "reciprocal" tariffs.

The complaint cited a previous lawsuit, VOS Selections, Inc. vs. Trump, filed against the Trump administration, for which the US Supreme Court heard arguments in early November.

"This separate action is necessary, however, because even if the IEEPA duties and underlying executive orders are held unlawful by the Supreme Court, importers that have paid IEEPA duties, including Plaintiff, are not guaranteed a refund for those unlawfully collected tariffs in the absence of their own judgment and judicial relief," the complaint reads.

The complaint highlights a process called liquidation, which is when customs completes its final review and determines the official amount of duty for a particular shipment. Liquidation typically provides Customs and Border Protection with the opportunity to either refund the importer or demand additional duties to be paid. This process must be completed within one year of a shipment's entry unless it is extended at the discretion of the CBP. It is unknown if a refund could happen once liquidation is over.

According to the complaint, tariffs on Costco's imports will begin to be liquidated as early as December 15, and the CBP has already declined the company's request to extend the liquidation.

"Plaintiff seeks relief from the impending liquidations to ensure that its right to a complete refund is not jeopardized," the complaint reads.

The Court of International Trade and the District Court for the District of Columbia have both ruled the IEEPA tariffs illegal on separate occasions. Their rulings are mostly based on the Constitution, which says that Congress has the exclusive power to levy taxes and collect duties. The Court of Appeals for the Federal Circuit reaffirmed the CTI's decision in August.

The use of the IEEPA for tariffs eventually made its way to the Supreme Court, and the court is currently deliberating.

Costco did not specify the amount of duties it has paid in the complaint. Treasury Secretary Scott Bessent said in a filing submitted to SCOTUS in September that the government could end up owing $1 trillion in tariffs should the court rule against the Trump administration.

Earlier this year, Costco's CEO, Ron Vachris, said during a Q2 earnings call, "About a third of our sales in the US are imported from other countries, and less than half of those are items coming from China, Mexico, and Canada." This was before Trump's April 2 "Liberation Day" tariffs.

Costco, the White House, and the US Customs and Border Protection agency did not immediately respond to requests for comment.