Key Takeaways:

  • Costco Wholesale has sued the Trump administration, asking a court to declare tariffs imposed by President Donald Trump under the International Emergency Economic Powers Act (IEEPA) unlawful and to require "defendants to refund in full all IEEPA tariffs that plaintiff has paid to the United States." The complaint was filed Friday at the U.S. Court of International Trade.
  • The lawsuit names U.S. Customs and Border Protection (CBP), CBP Commissioner Rodney Scott, and the U.S. government as defendants, and acknowledges that the Supreme Court is expected to rule soon on the Federal Circuit's finding that IEEPA tariffs are "unlawful."
  • The warehouse retailer's attorneys stressed the urgency of pursuing separate legal action, noting that tariffs Costco has paid are beginning to enter the "liquidation" (i.e., final assessment) process, after which they may be unrecoverable. "This Court and the Federal Circuit have warned that even if the legality of a tariff is later found unlawful, importers may lose the legal right to seek a refund because their goods have been liquidated," the complaint states.

Deep Dive:

Costco's move aims to secure refunds if the Supreme Court rules these sweeping tariffs unlawful. According to the Wall Street Journal, this makes the Issaquah, Washington-based company one of the largest businesses to sue the Trump administration over tariffs.

A CBP spokesperson did not directly comment on the lawsuit but emailed CFO Dive a statement from White House Deputy Press Secretary Kush Desai. In the statement, Desai said: "The economic consequences of not supporting President Trump's lawful tariffs would be enormous, and this lawsuit highlights exactly that. The White House looks forward to the Supreme Court resolving this matter swiftly and properly."

Alex Durant, senior economist at the Tax Foundation, said he is unsure whether a lawsuit from a large company like Costco will trigger a "floodgate effect" of more companies following suit. But he expects many businesses want clarity on whether these tariffs will hold up before setting their 2026 strategies.

"My impression right now is that a lot of these companies have been drawing down existing inventory," Durant said in an interview. "I think they need clarity on whether the tariffs are valid, and that has implications for their planning."

Durant noted that even if the Supreme Court strikes down IEEPA-based tariffs, the president could still use other legal avenues such as the Trade Act of 1974 to impose tariffs. However, those avenues may be much narrower in scope. "He won't be able to impose tariffs as broadly as he does now," Durant said.

The lawsuit filed this week also details uncertainties in the multi-step customs process that affect challenges Costco and other importers face in managing tariff costs and timing of payments.

According to the complaint, importers of record initially pay estimated tariffs based on entry documents, and CBP then assesses duties by confirming final value, classification, rates, and amounts owed. "Once CBP determines the final amount owed, it 'liquidates' the goods and notifies the importer of record whether additional duties are owed or a refund is due." The complaint notes CBP aims to complete liquidation or assessment within 314 days of goods entering the country.

Costco has previously taken several tariff mitigation strategies, including purchasing seasonal goods early, shifting sourcing away from countries with high tariff exposure, and increasing procurement of its private-label Kirkland Signature products in countries or regions where goods are sold. Company executives have revealed these measures during earnings calls. At Costco's most recent earnings call in September, executives struck a far milder tone than the lawsuit's language, with CFO Gary Millerchip saying the tariff environment remained "fluid" but insisting the company was "doing a phenomenal job navigating it."

In contrast, Costco claims in the complaint that the company "faces imminent and irreparable harm because goods on which it has paid IEEPA tariffs are expected to be liquidated as early as December 15, 2025."

The complaint does not disclose the specific amount Costco is seeking in refunds, and a spokesperson for the attorneys representing Costco declined to comment on the lawsuit.