Costco sues Trump admin for tariff refunds before Supreme Court ruling

Costco sued the Trump administration for a full refund of new tariffs it has paid so far this year and to prevent those import duties from continuing to be collected from the retail warehouse club giant while a Supreme Court case plays out.

In the suit filed Friday, Costco said it risks losing money it already paid to satisfy the tariffs, even if the Supreme Court ultimately upholds earlier lower court rulings that President Donald Trump lacked the legal authority to impose the tariffs.

The company cited the approaching Dec. 15 deadline, which could prevent reimbursement of fares it has already paid on an estimated basis. Costco has not said how much money it says the company should be refunded.

Costco’s suit, filed in the U.S. Court of International Trade, says U.S. Customs and Border Protection denied the company’s request to extend the Dec. 15 date of the so-called liquidation, the final calculation of tariffs imposed on imported items.

Although an importer has six months to file a claim contesting the liquidation, “not all liquidations are protestable,” the suit states.

Dozens of other companies have filed similar lawsuits to protect their right to possible refunds in case the Supreme Court rules against the so-called reciprocal tariffs that Trump has imposed on imports from many of the United States’ trading partners and his so-called fentanyl tariffs on products from Canada, China and Mexico.

Trump invoked the International Emergency Economic Powers Act to impose these often high tariffs.

In August, the U.S. Court of Appeals for the Federal Circuit upheld, by a 7-4 vote, an earlier ruling by the Court of International Trade that Trump did not have that authority.

“The primary power of Congress to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution,” the Federal Circuit said in its decision. “Tariffs are an essential power of Congress.”

During oral arguments on November 5, a majority of the Supreme Court’s nine justices were skeptical of arguments by a Trump administration lawyer that the president actually had the authority to impose the tariffs.

The Supreme Court quickly granted the administration’s appeal of the lower court rulings, but it is unclear when or how the court will decide the dispute.

Costco, in its lawsuit, said: “This separate action is necessary, however, because even if the IEEPA duties and underlying executive orders are found illegal by the Supreme Court, importers who paid the IEEPA duties, including Plaintiff, are not guaranteed a refund for these illegally collected duties absent their own judgment and judicial action.” »

“This Court and the Federal Circuit have cautioned that an importer may not have a legal right to recover duty refunds for imports that have been liquidated, even if the underlying legality of a tariff is later found to be illegal,” the suit states.

White House spokesperson Kush Desai said in a statement regarding Costco’s lawsuit: “The economic consequences of failing to comply with President Trump’s legal tariffs are enormous and this lawsuit highlights that fact. »

“The White House looks forward to a prompt and appropriate resolution of this matter by the Supreme Court,” Desai said.

CNBC has requested comment from Costco.

The Trump administration has warned of the potential consequences of having to repay hundreds of millions of dollars in tariffs if the Supreme Court upholds lower court rulings that Trump did not have the authority under IEEPA to unilaterally impose those duties.