Costco Is Suing Trump Administration Over Tariffs, Claiming The White House Broke the Rules
Costco isn’t just bulk-buying chicken thighs and sheet cakes, it’s taking on the Trump administration in federal court.
The warehouse giant filed a lawsuit with the Court of International Trade last Friday, arguing that the White House stretched its executive power way past the legal limits when it slapped tariffs on imported goods. At the center of the fight is the International Emergency Economic Powers Act (IEEPA), the law the administration used as its justification.
Costco’s claim? IEEPA wasn’t built for this. The company points to the law’s language, which says presidential powers can only be used to confront “an unusual and extraordinary threat” tied directly to a declared national emergency. And nowhere in the statute—Costco emphasizes—is the word “tariff.”
The showdown arrives as the Supreme Court is already weighing the legality of Trump’s tariff strategy. During November’s arguments, the conservative-majority court didn’t sound entirely convinced. Chief Justice John Roberts questioned whether the administration was dressing up tax authority, which is a congressional power, as an emergency power play.
But Costco’s lawsuit adds a new wrinkle: timing.
Even if the Supreme Court eventually rules the tariffs unconstitutional, importers aren’t guaranteed to get their money back. Customs and Border Protection “liquidates” entries—essentially finalizing how much an importer owes—about 314 days after goods cross into the country. Once that window closes, some federal judges have warned that companies may lose the right to recover tariffs already paid, even if the underlying policy gets overturned later.
That’s the ticking clock Costco is trying to stop. The company wants the court to pause liquidation, declare the tariffs illegal, end the duty collection, and order refunds for everything Costco has already paid.
No word yet from Customs and Border Protection.
What we do know: tariff collections have ballooned. The U.S. pulled in $195 billion in fiscal year 2025, up from $118 billion the year before. Monthly totals jumped from $7 billion in January to $30 billion in September. Costco hasn’t said exactly how much of that came from their own ledger, but with a third of their U.S. sales coming from imports—almost half from China, Mexico, and Canada—the number isn’t small.
This case could determine whether retailers get their money back or whether those duties are gone for good.
