The American wholesale retail giant Costco has launched a significant legal challenge against the administration of former President Donald Trump. The company is contesting the sweeping use of emergency tariff powers, arguing the White House exceeded its executive authority.
Legal Battle Over Presidential Powers
In a lawsuit filed with the US Court of International Trade on Friday, 24 October 2025, Costco contends the Trump administration misused the International Emergency Economic Powers Act (IEEPA). This federal law was cited as the justification for imposing the tariffs in question.
The warehouse club chain, the largest of its kind in the United States, pointedly notes the IEEPA statute "does not use the word 'tariff' or any term of equivalent meaning". The law grants the president powers solely "to deal with an unusual and extraordinary threat" for which a national emergency is declared, Costco's filing states.
The Urgent Risk of Lost Refunds
Costco's lawsuit comes amid a pivotal moment. The US Supreme Court heard oral arguments on Trump's tariffs in November 2024, with a ruling expected in the spring of 2025. During arguments, Chief Justice John Roberts expressed scepticism, remarking that imposing taxes on Americans "has always been a core power of Congress".
However, Costco argues its case cannot wait. The company warns that even if the Supreme Court deems the tariffs unconstitutional, importers like itself may be unable to reclaim the duties paid. This is due to a process called "liquidation".
US Customs and Border Protection (CBP) finalises, or liquidates, the total tariffs owed by an importer 314 days after goods enter the country. Federal courts have indicated that once liquidation occurs, importers may lose the legal right to a refund, even if the underlying tariff is later found unlawful.
Soaring Duties and Global Trade Impact
The financial stakes are enormous. According to the Committee for a Responsible Federal Budget, total tariff collections soared to $195 billion in the 2025 fiscal year (ending September 2025), up dramatically from $118 billion in fiscal year 2024. Monthly collections jumped from around $7 billion in January 2025 to $30 billion by September.
While Costco has not disclosed its specific tariff bill, the company has revealed that a third of its US sales are imports, with nearly half of those originating from China, Mexico, and Canada.
In its legal action, Costco is seeking several remedies from the Court of International Trade:
- A declaration that Trump's tariffs are illegal.
- An order to halt further collection of the duties.
- A full refund for any tariffs already paid under the challenged authority.
- An injunction to stop CBP from liquidating the duties during the legal process.
CBP did not immediately respond to requests for comment on the lawsuit. This case places a major corporate player directly against the trade policy legacy of the Trump administration, setting a crucial precedent for the limits of presidential emergency powers in economic policy.
