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Costco has added its voice and heft to a lawsuit against the U.S. government seeking to ensure they will be reimbursed for tariffs they’ve been forced to pay if the U.S. Supreme Court rejects President Donald Trump’s assertion that he has sweeping authority to impose tariffs.
The membership-based warehouse club that sells groceries and a raft of other goods, including clothing and electronics, filed a complaint last Friday in the U.S. Court of International Trade in Manhattan. It stated that Trump’s use of the International Emergency Economic Powers Act to impose tariffs left it uncertain whether businesses will be able to recoup sums they should not have paid.
“It’s uncertain whether refunds will be granted and, if so, how much,” Brent Skorup, a legal fellow at the libertarian Cato Institute told The Associated Press. He says the possibility has prompted many companies to file actions at the trade court to “get in line, so to speak, for potential refunds.”
Trump claims that he has an almost unlimited right to impose tariffs — a power the Constitution gives to Congress, under the 1977 International Emergency Economic Powers Act (IEEPA) — but he has now lost that argument twice in court.
Trade lawyer Tim Meyer says if Trump ultimately loses at the Supreme Court and the tariffs are ruled unlawful, Costco will have a very strong case before the U.S. International Trade Court that it is entitled to a refund.
The case then becomes much more about how much Costco paid and if they’ve followed the right legal steps to be entitled to a refund, he told CBC’s Sarah Galashan from Durham, N.C. “Do they have the appropriate records and have they done the appropriate administrative steps necessary to claim a refund?”
In its filing, Costco said it is demanding the money back now to ensure that its “right to a complete refund is not jeopardized.”
The company expressed concern that it could not get a refund once the tariff bills have have gone through liquidation by U.S. Customs and Border Protection, a process Costco says will start Dec. 15.
Has Congress given the U.S. president the power to impose tariffs through the International Emergency Economic Powers Act? Andrew Chang unpacks the arguments for and against the use of the statute. Plus, how China uses its buying power as a weapon.
Costco, with its $275.2 billion US of revenue for the fiscal year ending Aug. 31, adds considerable heft to dozens of other companies also suing to safeguard potential refunds.
Other companies suing include Bumble Bee Foods, Ray-Ban eyeglass maker EssilorLuxottica, Kawasaki Motors, Revlon and Yokohama Tire, court records show.
Meyer, who also teaches international business law at Duke University, told CBC that if Costco is successful, more companies will be likely to file similar cases.
“What we’re likely to see is really a wave of lawsuits, seeking billions of dollars in terms of refunds.”
During oral arguments on Nov. 5, Supreme Court justices from both sides of the political spectrum asked skeptical questions about whether Trump legally used the 1977 emergency powers law to impose tariffs.
The justices took the case on an accelerated basis, but have not said when they will rule.
Costco has taken multiple steps to address tariffs, including by reducing the number of suppliers, and relying more on local sourcing and its in-house Kirkland brand.
U.S. President Donald Trump rolled back tariffs on dozens of food products, as concerns over grocery costs rise. The exemptions took retroactive effect on Thursday at midnight.
