Costco is actively pursuing legal action against the U.S. government regarding tariffs imposed during Donald Trump’s presidency. The wholesale retailer has filed a lawsuit in the U.S. Court of International Trade against the U.S., the U.S. Customs and Border Protection (CBP) agency, and its commissioner, Rodney S. Scott.
Costco’s Legal Challenge Against Tariffs
The lawsuit seeks to invalidate the tariffs enacted by Trump under the International Emergency Economic Powers Act (IEEPA). Costco is also requesting full refunds for the tariffs it has previously paid.
Details of the Lawsuit
Filed on November 28, the complaint asserts that the retailer requires a full refund on duties it paid as a result of tariffs deemed “reciprocal” by Trump. The lawsuit cites the earlier case of VOS Selections, Inc. vs. Trump, which the Supreme Court heard in early November.
The lawsuit emphasizes a process known as liquidation. This occurs when customs finalize their review and set the specific duty amount for shipments. Liquidation offers the CBP the chance to refund importers or request additional duties. It generally must be completed within one year of a shipment’s entry, although extensions may occur at the CBP’s discretion. However, it remains uncertain if refunds can be issued after the liquidation process concludes.
- Liquidation for Costco’s imports could begin as early as December 15.
- The CBP has already denied Costco’s request to postpone this liquidation.
Constitutional Context
Both the Court of International Trade and the District Court for the District of Columbia have previously ruled the IEEPA tariffs illegal, contending that the Constitution gives Congress the sole authority to levy taxes and collect duties. In August, the Court of Appeals for the Federal Circuit upheld these decisions.
The IEEPA tariffs have gained attention, as the matter has reached the Supreme Court. Currently, justices are deliberating on the case, which could potentially affect the future of tariffs.
Potential Financial Implications
While Costco has not disclosed the specific amount of duties it has paid, Treasury Secretary Scott Bessent indicated that the government could face liabilities of up to $1 trillion if the Supreme Court rules against the Trump administration.
Earlier this year, Costco’s CEO, Ron Vachris, noted that about a third of the company’s U.S. sales are derived from imported goods, with less than half sourced from China, Mexico, and Canada. This was prior to the new tariffs implemented by Trump in April.
As of now, neither Costco, the White House, nor the U.S. Customs and Border Protection agency have provided comments regarding the lawsuit.
