Costco Joins Growing Legal Challenge to Trump Tariffs as Companies Seek Billions in Potential Refunds

The warehouse retailer has expressed significant concerns about potential difficulties in securing refunds for tariff payments.

Costco has joined a growing list of corporations not waiting for the Supreme Court's decision on President Donald Trump's extensive import taxes, instead taking legal action to claim refunds on tariffs already paid.

Earlier this year, both the specialized US Court of International Trade in New York and the US Court of Appeals for the Federal Circuit in Washington ruled that Trump's most substantial import taxes are illegal. The matter has now reached the Supreme Court, where during a November 5 hearing, several justices questioned the president's authority to declare national emergencies for imposing tariffs on goods from virtually all countries.

Should the court rule against these tariffs, importers may be entitled to refunds on paid levies. Brent Skorup, a legal fellow at the libertarian Cato Institute, noted, "It's uncertain whether refunds will be granted and, if so, how much. But the possibility has prompted many companies - including Costco - to file actions in the US Court of International Trade to get in line, so to speak, for potential refunds."

Trump has asserted an almost unlimited right to impose tariffs under the 1977 International Emergency Economic Powers Act (IEEPA), despite this power constitutionally belonging to Congress. Having lost twice in court already, the case continues to progress. Joyce Adetutu, a partner at Vinson & Elkins law firm, explained that Costco is attempting to "make sure that if and when the Supreme Court overturns the IEEPA tariffs, which could come as late as the summertime, they have the judgment in place" to collect a refund.

In its complaint filed last week with the trade court in New York, Costco stated it is demanding immediate repayment "to ensure that its right to a complete refund is not jeopardized."

The retail giant expressed particular concern about potential difficulties in securing refunds once tariff bills are finalized - a process called "liquidation" by the Customs and Border Protection agency, scheduled to begin December 15. Importers have a 180-day window after liquidation to contest tariff bills. According to Adetutu, Costco worries that "their timeline might be whittled away depending on how long it takes to get a Supreme Court decision."

Other major companies including Revlon and Bumble Bee Foods, a producer of canned seafood and chicken, have presented similar arguments in the trade court.

The tariffs under legal challenge have generated approximately $90 billion in revenue thus far.

The potential refund process remains ambiguous. As import tax assessments are finalized and sometimes appealed, Customs and Border Protection "refunds tariffs every day, but not to this extent," Adetutu noted. "This is a substantial amount of tariff income that has been collected. And really there hasn't been a case where there's been an influx of refund requests."

In August, Trump warned that eliminating his tariffs would devastate the American economy, potentially leading to "1929 all over again, a GREAT DEPRESSION!"