Costco, the giant membership warehouse retailer with more than 800 stores across the United States, has stepped into the legal fray against the Trump administration’s sweeping tariffs—a move that could have billion-dollar implications for American businesses. On December 1, 2025, Costco filed a lawsuit in the U.S. Court of International Trade, demanding a full refund of the import duties it has paid under tariffs imposed by President Donald Trump earlier this year. The company is also seeking an immediate injunction to halt further tariff payments on products already imported, at least until the Supreme Court rules on the legality of these controversial levies.
According to ABC News, Costco’s legal complaint centers on the International Emergency Economic Powers Act (IEEPA) of 1977, which President Trump invoked in April 2025 to justify a wave of global tariffs. The administration argued that the IEEPA grants the president broad authority to regulate international commerce in the face of an "unusual and extraordinary threat." However, Costco and a growing list of U.S. companies—including Ray-Ban, Revlon, Bumble Bee, and Kawasaki—contend that only Congress has the constitutional power to set tariffs, and that the IEEPA does not explicitly authorize the president to impose such duties.
Costco’s lawsuit is not unique in its arguments. In fact, the company filed a motion to combine its case with nearly two dozen similar lawsuits from other American businesses, citing that "the complaints are materially identical in allegations, theories, and ultimate requested relief." As Al Jazeera reported, the firm is represented by Crowell & Moring, and the legal action comes just before a crucial December 15 deadline for refunding taxes already paid. U.S. Customs and Border Protection, however, denied Costco’s request to extend this deadline, potentially putting millions in refunds at risk.
“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,” the suit states, according to Al Jazeera. The company’s concerns are not merely theoretical. As NBC News highlighted, through late September 2025, importers have collectively paid nearly $90 billion under IEEPA tariffs. If the Supreme Court eventually strikes down the tariffs, the government could be on the hook for massive refunds—an outcome that has both the business community and the White House on edge.
Costco has not disclosed the exact amount it has paid in tariffs, but its financial exposure is significant. In a May 2025 earnings call, Costco’s Chief Financial Officer Gary Millerchip told investors that about one-third of the company’s U.S. sales come from imported products, with 8% of total sales originating from China. The company has absorbed the impact of tariffs on some key fresh food items, such as pineapples and bananas imported from Central and South America, choosing not to raise prices for customers. “We essentially held the price on those to make sure that we’re protecting the member,” Millerchip explained, as reported by NBC News. To further mitigate the tariff burden, Costco has worked closely with suppliers, shifting production to other countries and consolidating global buying efforts to lower costs.
Legal experts say Costco’s entry into the lawsuit queue marks a turning point. “This is the first time we’re seeing big companies take their heads out of the sand publicly,” Marc Busch, a trade law expert at Georgetown University, told NPR. Until now, most legal challenges had come from small and mid-sized firms. But with retail heavyweights like Costco joining the fight, the stakes—and the visibility—of the challenge have risen sharply.
The heart of Costco’s argument is that President Trump overstepped his authority by using the IEEPA to impose tariffs on products from more than 100 countries. The text of the law, as the lawsuit points out, does not mention tariffs or any equivalent terms. Instead, it allows the president to regulate or prohibit foreign transactions during a national emergency, not to set import duties. “Because IEEPA does not clearly authorize the President to set tariffs ... the Challenged Tariff Orders cannot stand and the defendants are not authorized to implement and collect them,” Costco’s lawyers wrote in their court filing, according to NBC News.
The Supreme Court now holds the fate of these tariffs in its hands. Oral arguments held in early November 2025 revealed skepticism from justices across the ideological spectrum. Justice Neil Gorsuch, appointed by Trump himself, questioned whether Congress could ever reclaim powers once handed over to the executive branch. “Congress, as a practical matter, can’t get this power back once it’s handed it over to the president,” Gorsuch said, as quoted by Al Jazeera. “It’s a one-way ratchet toward the gradual-but-continual accretion of power in the executive branch and away from the people’s elected representatives.”
Lower courts have already ruled against the administration’s use of the IEEPA to set tariffs, but have kept the duties in place while the Supreme Court reviews the case. The justices’ decision, expected early in 2026, could have far-reaching consequences. If the tariffs are struck down, more than $90 billion in refunds may be owed to importers. Yet even a Supreme Court victory for Costco and its peers is no guarantee of a refund. As the company’s lawsuit notes, importers must file their own legal actions to secure repayment—there’s no automatic process.
The White House, for its part, has vigorously defended the tariffs and the president’s authority under the IEEPA. “The economic consequences of the failure to uphold President Trump’s lawful tariffs are enormous and this suit highlights that fact,” White House deputy press secretary Kush Desai said in a statement to ABC News and Al Jazeera. “The White House looks forward to the Supreme Court’s speedy and proper resolution of this matter.” The administration has also warned that should the government lose, alternative legal avenues for imposing tariffs remain available, though some are already in use.
Costco’s legal gambit comes at a time of market uncertainty and political tension. The company’s stock rose slightly—by 0.2 percent in midday trading on December 2, as noted by Al Jazeera—perhaps reflecting investor optimism about a possible refund or simply relief that the company is taking proactive steps to manage its exposure. Meanwhile, the list of companies seeking similar relief continues to grow, from global brands like Revlon and EssilorLuxottica to specialty importers and small manufacturers.
As the Supreme Court prepares to issue its ruling, the business community is watching closely. For Costco and dozens of others, the outcome could mean the difference between recouping millions—or even billions—in tariff payments, or absorbing those costs permanently. With so much at stake, the case is shaping up to be a defining moment in the ongoing debate over presidential power, congressional authority, and the role of tariffs in U.S. trade policy.
The next few months promise to be pivotal not only for Costco, but for the entire landscape of American trade and executive authority. The Supreme Court’s decision will almost certainly reverberate far beyond the warehouse aisles and into the heart of U.S. economic policy.
