Costco Challenges U.S. Government in Tariff Refund Legal Battle

In a significant legal move, Costco has taken the U.S. government to court in pursuit of a complete refund of tariff charges, contingent on the outcome of a Supreme Court case that may scrutinize President Donald Trump’s authority to impose these tariffs without Congressional consent. The lawsuit, submitted on Friday, expresses concerns that Costco might be unable to recover the funds it has already disbursed under the current tariff laws, should they eventually be deemed unlawful. The tariffs in question were enacted as emergency measures invoked under the International Emergency Economic Powers Act (IEEPA). Costco highlighted a critical deadline of December 15 that may hinder its chances of reclaiming overpayments, following the denial of its request by U.S. Customs and Border Protection to extend the liquidation date. The specifics regarding the amount Costco is seeking were not detailed in the lawsuit. Typically, importers have a six-month window to challenge tariff assessments; however, Costco pointed out that specific tariff evaluations become uncontestable over time, leaving companies at risk of forfeiting refunds if the tariffs are later invalidated. The company’s legal representatives noted that “a separate action is necessary” to ensure guaranteed refunds “in the absence of their own judgment and judicial relief.” The lawsuit emphasizes that “This Court and the Federal Circuit have cautioned that an importer may lack the legal right to recover refunds of duties for entries that have liquidated, even where the underlying legality of a tariff is later found to be unlawful.” In support of the tariffs, White House spokesman Kush Desai remarked, “The economic consequences of the failure to uphold President Trump’s lawful tariffs are enormous and this suit highlights that fact.” He expressed anticipation for a “speedy and proper resolution” by the Supreme Court regarding this matter. As the third-largest retailer globally, Costco is amongst numerous companies engaging in similar legal efforts to safeguard their ability to reclaim payments made under the “reciprocal” tariffs imposed on diverse trading partners, including countries such as Canada, China, and Mexico. According to trade data from the U.S. customs agency, importers had already contributed approximately $90 billion under the emergency tariff regime by the end of September.