Costco pushes back — sues to lock in tariff refunds before Supreme Court ruling

Costco has filed suit in the U.S. Court of International Trade, asking a judge to declare certain import tariffs unlawful, prevent future tariffs under the same orders, and guarantee refunds for duties the company already paid. The filing comes as the legal fate of those tariffs — imposed by the Donald J. Trump administration under the International Emergency Economic Powers Act (IEEPA) — winds its way through the courts. According to the complaint, U.S. Customs and Border Protection (CBP) denied Costco’s request for extra time to finalize tariff calculations, a move the retailer says jeopardizes its refund eligibility even if the tariffs are later ruled unlawful. 

Costco isn’t unique in this effort: it joins a growing list of companies — from manufacturers to food producers — seeking protection against potential losses. Given that the retailer is among America’s largest importers (with roughly one-third of U.S. sales derived from imported goods), the stakes are high. For Costco, failure to secure refunds could mean absorbing millions in extra costs or raising prices for consumers. 

The legal argument: executive overreach under IEEPA

At the heart of Costco’s case is a fundamental constitutional question: whether the IEEPA — a law originally designed to give presidents limited emergency powers over foreign transactions — can legitimately be used to impose sweeping, economy-wide import tariffs. Critics argue it cannot. IEEPA’s statutory language authorizes “regulation” of imports during a national emergency, but it never explicitly authorizes “tariffs,” “duties,” or “taxes” — power that under the Constitution belongs to Congress. 

Earlier this year, a panel of the U.S. Court of International Trade agreed, ruling the tariffs unlawful and enjoining their enforcement. The ruling found that using IEEPA for broad-based tariffs violated the nondelegation doctrine and the so-called “major questions” doctrine, which requires clear congressional authorization for policies of vast economic and political significance. 

That decision was affirmed by the U.S. Court of Appeals for the Federal Circuit, which maintained that the president had overstepped. But it also paused enforcement of the injunction and allowed tariffs to remain in effect pending appeal — leaving the door open for further litigation. 

Supreme Court steps in: major test for presidential tariff power

In September 2025, the Supreme Court agreed to hear consolidated appeals challenging the tariffs — including cases from V.O.S. Selections, Inc. and Learning Resources, Inc.. Oral arguments were heard in early November. Justices from across the ideological spectrum raised serious doubts about the administration’s use of emergency powers to impose sweeping tariffs, with some questioning whether IEEPA was ever meant for that purpose. 

The Court’s decision — expected potentially by mid-2026 — will have massive implications. A ruling against the tariffs could mean they must be rescinded and prior payments refunded, while a ruling upholding them would validate broad executive trade powers and reshape U.S. trade policy. Until then, the tariffs remain in effect, with relief for importers like Costco uncertain. 

Why Costco filed

before

a final ruling

Costco’s legal move is driven by timing: import entries subject to the tariffs are approaching “liquidation,” the customs process that finalizes duty assessments. Once entries liquidate, recovering paid tariffs becomes significantly more difficult — even if those tariffs are later struck down. By suing now, Costco aims to preserve refund rights and block further tariff application. 

In effect, the company is hedging — seeking judicial protection in advance of a ruling, rather than waiting and hoping refunds will be granted later. This proactive approach reflects the scale of potential liability: for a large importer with substantial imports, tariffs could amount to hundreds of millions. 

What to watch next

All eyes now are on the Supreme Court’s ruling. If the Court sides against the tariffs, expect a wave of refund claims — not only from Costco, but from dozens of other importers. However, even a favorable ruling doesn’t guarantee automatic refunds; many companies may still need to file separate claims under statutes like 19 U.S.C. § 1514 to recover duties. 

On the policy front, a decision against executive tariff powers could limit future administrations from imposing wide-ranging trade measures without explicit congressional authorization. Conversely, an upholding would mark a major expansion of presidential authority — potentially reshaping how trade policy is managed. Either way, the case could affect global supply chains, consumer prices, and the balance of power between Congress and the presidency.