Costco Wholesale has filed a new lawsuit against the Trump administration. They are asking for a refund of the import duties paid this year in full. This lawsuit is a direct reaction to the protectionist tariffs that President Donald Trump instituted earlier this year. He did so using the 1977 International Emergency Economic Powers Act (IEEPA). The act gives the president sweeping powers to control international commerce during an “unusual and extraordinary threat.”
In April 2023, President Trump rolled out a new round of global tariffs. This abrupt move has raised serious alarms for hundreds of U.S. businesses. Costco’s lawsuit should be seen as an encouraging sign of a larger movement. The retailer intends to combine its case with almost two dozen other suits brought by other retailers and manufacturers who are fighting the legality of these tariffs.
Costco argues that even if the Supreme Court rules against the IEEPA duties and the executive orders that established them, businesses that have already paid these tariffs may not be guaranteed a refund without pursuing their own claims. This underscores the urgency of Costco’s procedural posturing in order to get its interests protected!
“This separate action is necessary, however, because even if the IEEPA duties and underlying executive orders are held unlawful by the Supreme Court, importers that have paid IEEPA duties, including Plaintiff, are not guaranteed a refund for those unlawfully collected tariffs in the absence of their own judgment and judicial relief.” – Costco (lawsuit document)
The context to this legal fight matters. President Trump invoked the IEEPA in April of this year as the legal justification for imposing his tariffs. He maintained that these precautions were necessary to protect U.S. economic interest from foreign threats. Yet, these tariffs have caused much contention and pushback from a variety of economic players.
Costco is continuing its efforts to consolidate the lawsuits. The company noted that the complaints share common allegations and prayers for relief. This method can help reduce legal costs while improving the likelihood of a positive resolution for enrolling companies.
“The complaints are materially identical in allegations, theories, and ultimate requested relief.” – Costco (motion to combine lawsuit)
As of today, at least one of those lawsuits challenging the IEEPA tariffs is awaiting a decision before the U.S. Supreme Court. A ruling is expected in the early part of next year, but whatever happens, the ruling will have foundational implications for all companies subject to these tariffs.
Costco’s legal action underscores its commitment to addressing the burdens posed by our international trade regulatory regime. Across the board, the company vigorously lobbies to protect its financial interests. If settled or validated, this lawsuit could establish a large precedent. It will establish precedent for how companies should react to tariffs imposed by the government in the future.
