Although it was not the first company to take action, its lawsuit has become a major legal event. We are talking about the lawsuit filed by Costco against the government of Donald Trump for misusing the International Emergency Economic Powers Act (IEEPA) to impose its tariffs. The retail company is demanding a full refund of the import duties they have had to pay. Although Costco has not provided a specific figure, data from U.S. Customs and Border Protection indicates that importers have paid nearly $90 billion under the IEEPA law. Where is that money? Costco believes that the government kept money that did not belong to it and is demanding a refund.
Currently, it is the Supreme Court that is reviewing the legality of Trump’s tariff decisions, which, after posing tough questions to Attorney General D. John Sauer, seem to raise doubts. Costco’s Chief Financial Officer, Gary Millerchip, stated that the company is suffering the consequences for trying to mitigate the impact of tariffs on its customers. This is not the first lawsuit on this matter, as companies like Revlon, EssilorLuxottica, Kawasaki, Bumblebee, Yokohama Tire, and many small and medium-sized businesses have done so before, but with Costco joining, the issue takes on a completely different dimension. According to Kush Desai, a White House spokesperson, a “quick and appropriate” resolution is expected.
Costco agains Trump’s tariffs
Costco Wholesale has sued the Trump administration in the International Trade Court for having made improper use of the International Emergency Economic Powers Act (IEEPA). The company is demanding a “full refund” of the duties it has had to pay since the Trump tariffs came into effect. According to Costco’s lawyer, “Because the IEEPA does not clearly authorize the President to impose tariffs … the Challenged Tariff Orders cannot be upheld and the defendants are not authorized to implement or collect them”.
Although the company has not provided a specific figure, data from U.S. Customs and Border Protection through the end of September show that importers have paid nearly $90 billion under the IEEPA. Currently, the Supreme Court, which is evaluating the legality of Trump’s tariff policy, and after questioning Solicitor General D. John Sauer, seem to have doubts.
Costco’s Motivations
According to Costco’s Chief Financial Officer, Gary Millerchip, around one-third of Costco’s sales in the U.S. are imported products, with 8% being items imported from China to the U.S. He also mentioned the efforts the company has made in facing the direct impact of tariffs on fresh food imports from Central and South America, after deciding not to raise prices “because they are basic items. Essentially, we have kept the price on those to ensure that we are protecting the member,” he said.
“We continue to work closely with our suppliers to find ways to mitigate the impact of tariffs, including shifting the country of production where it makes sense and consolidating our global purchasing efforts to reduce product costs across all our markets”, he added.
More lawsuits against Trump’s tariffs
At the end of October, the government had collected $205 billion in tariffs, which is why Costco Wholesale believes the government has kept money that does not belong to it. This lawsuit adds to those already filed against the Trump administration by companies such as the global cosmetics giant Revlon, eyewear manufacturer EssilorLuxottica, motorcycle maker Kawasaki, canned food seller Bumble Bee, Japanese car supplier Yokohama Tire, and many small and medium-sized businesses.
Without a doubt, Costco’s importance in the market has given significant weight to this lawsuit, giving it greater prominence. From the White House, spokesperson Kush Desai stated, “The economic consequences of the failure to uphold President Trump’s lawful tariffs are enormous and this suit highlights that fact. The White House looks forward to the Supreme Court’s speedy and proper resolution of this matter”.