Costco Goes to War With Trump Tariffs — Lawsuit Warns Billions Could Be Lost Forever
Costco has become the biggest U.S. retailer to file an emergency lawsuit against the Trump administration’s tariff program — warning that a looming customs deadline could permanently block refunds if the Supreme Court rules the tariffs illegal.
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In a complaint filed in the U.S. Court of International Trade, Costco argues that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawfully enacted. But the immediate fight isn’t about overturning the policy — it’s about stopping U.S. Customs and Border Protection from “liquidating” Costco’s import entries starting December 15.
Liquidation is a technical step that finalizes tariff charges. Once it happens, importers may lose the legal right to challenge or reclaim those duties, even if the Supreme Court later finds the tariffs unconstitutional. Costco says that would cause “irreparable harm,” forcing companies to pay an illegal tax with no path to refunds.
The lawsuit signals rising panic in the business world. In recent weeks, Revlon, Kawasaki Motors, EssilorLuxottica, Bumble Bee Foods, Yokohama Tire, and dozens of smaller businesses have filed similar suits to preserve potential claims.
The rush comes as the Supreme Court fast-tracks its review of Trump’s tariff authority. Lower courts have repeatedly found that IEEPA does not permit the president to impose broad, revenue-generating tariffs without congressional approval. Several justices appeared skeptical of the administration’s legal theory during November’s oral arguments.
If the Court strikes down the tariffs, the government could face refund requests for duties already collected. Estimates vary widely, but analysts say exposure could range from $90 billion to as high as $1 trillion, depending on how many companies file claims.
Such a ruling would blow a hole in the administration’s economic strategy, which leans heavily on tariff revenue — with Trump even suggesting tariffs could someday replace federal income taxes altogether.
For Costco, the case is about protecting its balance sheet. For Washington, it’s about the stability of a core revenue stream. For the broader economy, it’s a potential fiscal shock few policymakers are prepared to handle.
The Supreme Court’s decision is expected in the coming weeks or months, but the legal and financial fallout has already begun.