The wholesale giant claims the White House misused emergency authority and warns importers could lose refunds even if duties are ruled unlawful

Lauren Aratani in New York

Tue 2 Dec 2025 17.27 GMT

Share

Costco is suing the Trump administration over its tariffs, arguing that the White House has exceeded its executive authority in instituting tariffs and that it should be entitled to a refund if the tariffs are found unconstitutional.

In a lawsuit filed to the Court of International Trade last Friday, the retail giant argued the Trump administration has misused the federal law, the International Emergency Economic Powers Act (IEEPA), it cited to impose the tariffs.

“IEEPA grants the president certain power, but they ‘may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared for purposes of this chapter and may not be exercised for any other purposes’,” Costco said in the lawsuit, quoting the law. The largest warehouse club chain in the US also pointed out the law “does not use the word ‘tariff’ or any term of equivalent meaning”.

In November, the supreme court heard oral arguments over Donald Trump’s tariffs, and justices in the conservative-majority court appeared skeptical over the White House’s arguments that the IEEPA covers Trump’s tariffs.

“The vehicle is the imposition of taxes on Americans, and that has always been a core power of Congress,” chief justice, John Roberts, said during arguments.

While the supreme court is set to make its decision on the tariffs in the spring, Costco said its lawsuit is urgent because even if the supreme court ruled Trump’s tariffs unconstitutional, importers are not guaranteed a refund for “those unlawfully collected tariffs”.

Customs and Border Protection (CBP), the federal agency that collects tariffs, “liquidates” or finalizes the total amount of tariffs an importer owes 314 days after the goods enter the country. Federal courts have warned that importers may lack legal rights to recover refunds of tariffs for goods that have been liquidated, “even where the underlying legality of a tariff is later found to be unlawful”.

If too much time has passed since an importer paid a tariff, importers like Costco might not get a refund on the tariffs, even if the supreme court eventually deems the duties unconstitutional.

In addition to halting this liquidation, Costco is asking the court of international trade to declare Trump’s tariffs illegal, stop the collection of duties and order a refund for any of Trump’s tariffs that Costco paid. CBP did not immediately respond to the Guardian’s request for comment.

Total tariff collection in fiscal year 2025, which ended in September, soared to $195bn, compared to $118bn in fiscal year 2024, according to the Committee for a Responsible Federal Budget. Monthly custom duties went from $7bn in January to $30bn in September.

Costco has not disclosed how much it has paid in duties over the last year, but the company has said that a third of its sales in the US are imports from other countries, with nearly half coming from China, Mexico and Canada.

(http://www.autoadmit.com/thread.php?thread_id=5805252&forum_id=2#49477590)

https://www.kirkland.com/services/practices/intellectual-property/itc-section-337-proceedings

(http://www.autoadmit.com/thread.php?thread_id=5805252&forum_id=2#49477718)