Costco recently made headlines with its own lawsuit against the Trump administration. They are calling for the refund of tariffs unlawfully imposed pursuant to the International Emergency Economic Powers Act, IEEPA. This lawsuit is occurring at a time when the retailer is facing tremendous financial difficulties due to these tariffs. The case has reached the Supreme Court, which recently heard arguments regarding the legality of the tariffs that have impacted importers like Costco.
President Trump’s legal team is arguing that the president has emergency powers to impose these global tariffs. Among other costs, as of the end of September, that’s $90 billion that importers have already paid in IEEPA-related tariffs. This new data shared by the U.S. Customs Agency. Two lower courts have already ruled against the administration. They concluded that Trump overstepped his authority in enacting these tariffs without approval from Congress.
The U.S. Court of Appeals for the Federal Circuit has done so repeatedly, upholding these findings and ruling that Trump’s tariffs were illegal. Despite these rulings, Costco remains concerned about the potential difficulty in recovering its funds if the Supreme Court ultimately affirms the lower courts’ decisions.
Despite how well Costco has done overall, its business model has been dented by the operational impact of those tariffs. In response, its legal team is aggressively advancing a parallel action to seek judicial remedy. They urge that if a fair resolution is not reached, the economic impact may be catastrophic for businesses experiencing these tariffs.
White House spokesperson Kush Desai defended the administration’s stance, stating, “The economic consequences of the failure to uphold President Trump’s lawful tariffs are enormous and this suit highlights that fact.” He expressed hope for a swift resolution from the Supreme Court, remarking, “The White House looks forward to the Supreme Court’s speedy and proper resolution of this matter.”
In the court proceedings, a number of justices seemed doubtful about whether Trump had the statutory authority to impose tariffs on his own. This skepticism seems to be in line with previous comments from Trump. He argued that the U.S. was “bringing in Trillions of Dollars” thanks to tariffs and pledged Americans a “dividend of no less than $2000 per person” thanks to these policies.
Whatever the Supreme Court decides to do here, it will likely set important new precedents on the boundaries of presidential powers and economic policy. Costco has not said how much it is asking for in its suit. The result may have far-reaching impacts on the company, as well as on the trade policy and executive authority of the U.S. at large.