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Launching a major courtroom battle, retail behemoth Costco has filed a lawsuit targeting the White House, arguing that its invocation of executive authority to impose sweeping tariffs exceeds constitutional limits. The company is seeking a refund for tariffs paid and asking the court to halt the collections.

Legal Grounds: A Misuse of Emergency Powers

The legal filing, submitted to the Court of International Trade, focuses on the White House's application of the International Emergency Economic Powers Act (IEEPA). Costco claims this federal statute was wrongfully used to justify the tariffs. Quoting the law itself, the company noted that IEEPA grants powers only to deal with an "exceptional national threat" and crucially "does not use the word ‘tariff’ or any term of equivalent meaning".

"The mechanism constitutes the levying of duties on Americans, and that has traditionally remained a core power of Congress," remarked Chief Justice John Roberts during prior court proceedings.

A Race Against Time

Although the nation's highest court is set to decide on the constitutionality of the tariffs this spring, Costco's legal team contends immediate action is necessary. This is because government rules known as "liquidation," where the customs agency finalizes tariff amounts roughly ten months following goods are imported. Once liquidation occurs, legal precedent suggests importers could forfeit the legal right to claim reimbursements, "even if the underlying legality of a tariff is later found to be unlawful".

Therefore, should the Supreme Court strikes down the tariffs, Costco is concerned it might not recoup money previously submitted if an excessive period has passed.

What Costco Seeks

In its filing, Costco is asking the trade court to:

• Rule the Trump-era tariffs unlawful.
• Halt the continued collection of these tariffs.
• Mandate reimbursement for any duties the company has previously remitted.
• Prevent liquidation of its customs bills to preserve its right to a potential refund.

Broader Context

The scale of customs income has skyrocketed. Data shows overall duty revenue in the 2025 budget year soared to $195 billion, a significant rise from $118 billion the previous year. Monthly collections are said to have climbed from around $7 billion to $30 billion over those months.

Although the company has not revealed its specific tariff bill, it has indicated that roughly one-third of its American revenue are derived from overseas products, with nearly half originating from China, Mexico, and Canada.

This legal action places a spotlight on the ongoing tension between executive authority and legislative authority over trade policy, with billions of dollars potentially hanging in the balance.