Costco has diverged from the prevailing stance of corporate America by initiating legal action against the Trump administration on Friday. The company claims that the administration has exceeded its authority in imposing extensive tariffs this year and is seeking reimbursement should the Supreme Court ultimately invalidate these tariffs. The case presented before the Supreme Court last month centers on whether President Donald Trump possessed the legal authority to impose tariffs under the International Emergency Economic Powers Act. Trump exercised those powers to impose import tax rates reaching 50% on major trading partners such as India and Brazil, and as high as 145% on China earlier this year. As of late September, US Customs and Border Protection figures indicate the tariffs have imposed a burden of up to $90 billion on US importers. If the justices determine Trump lacked the authority, the next question is who—beyond the five small businesses challenging the tariffs—would qualify for refunds and how the process would unfold, with Justice Amy Coney Barrett warning during oral arguments that the refund process might be “a mess.”
In anticipation of possible refunds, many businesses have quietly sought extensions from CBP on finalizing tariff payments, a process that may take months due to the complexities of the tariff code. Delaying the finalization of the tariff effectively preserves the chance of future refunds. Costco’s strategy stands out: the company asserts in its Court of International Trade complaint that it and other importers do not inherently qualify for refunds if the Supreme Court rules against the administration. The filing also states that CBP rejected several of Costco’s requests related to finalizing tariff payments. Trump, who described the case as “LIFE OR DEATH for our Country” on Truth Social, may adopt tactics to hinder refund efforts if circumstances require. “The economic consequences of the failure to uphold President Trump’s lawful tariffs are enormous and this suit highlights that fact,” White House spokesperson Kush Desai.
Costco is compelled to escalate its efforts even at the risk of attracting White House scrutiny, according to Marc Busch, a Georgetown professor specializing in trade policy and law. “They’re clearly not convinced that the Supreme Court will address the complexities surrounding companies obtaining refunds or the government’s role in establishing a systematic process for that to occur,” Busch said, predicting that more companies may follow Costco’s lead. Its assertive lawsuit and criticism of Trump’s tariffs—describing them as enacted in a “pell-mell manner … with the markets gyrating in response”—could place the company in a precarious position with the administration. Amazon learned this risk firsthand when it allegedly planned to highlight tariff-driven price increases, which White House press secretary Karoline Leavitt called a “hostile and political act,” leading to a decline in Amazon’s shares.
After an angry call from Trump to Jeff Bezos, Amazon announced it would not implement tariff-related price hikes. Since then, Amazon and other major retailers have largely avoided actions that might provoke similar conflict, opting to remain passive observers despite having tens of millions of dollars at stake in the case. Emil Stefanutti noted that if Costco had not sued the administration, it might face a situation where the tariffs are ruled unlawful yet still be unable to recover its payments. “For a company of that magnitude, this could entail incurring substantial, possibly irretrievable expenses,” he said.