Costco Wholesale filed a significant lawsuit against the Trump administration on 28 November 2025, seeking refunds for tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The case arrives as the U.S. Supreme Court weighs the legality of these tariffs, putting one of the nation’s largest retailers at the center of a political and economic storm.
The dispute has already sparked social media backlash, with thousands of members announcing cancellations. Here’s what’s unfolding and why the legal, financial, and consumer stakes are higher than ever.
What’s Going On?
Costco claims that Trump’s 2025 tariffs exceed presidential authority, arguing the International Emergency Economic Powers Act does not allow sweeping, economy-wide duties. The retailer filed in the U.S. Court of International Trade seeking refunds and to halt ongoing tariff collection pending the Supreme Court’s review.
Over 70 other companies, including Revlon, EssilorLuxottica, and Kawasaki Motors, have filed similar suits. The coalition signals a coordinated effort to reclaim billions in duties. The scale hints at a potential ripple effect across American retail and import markets.
Who Is Involved?
Costco, headquartered in Issaquah, Washington, operates 905 warehouses globally, including 624 in the U.S., and serves 79.6 million cardholders. CEO Ron Vachris emphasized tariff mitigation, stating in September, “We are going to do everything we can to mitigate tariff impacts. The last effect would be that we pass on the price.”
CFO Gary Millerchip highlighted efforts on staples like bananas and pineapples: “We felt it was important to really eliminate the impact there for the member.” The Trump administration is represented publicly by White House spokesperson Kush Desai.
The Lawsuit’s Core Request
Filed on 28 November, Costco’s action seeks a declaration that Trump’s tariffs under IEEPA are unlawful. It requests a full refund of the tariffs paid this year, although exact figures were not disclosed, and an immediate halt to ongoing collections. Timing is critical due to liquidation deadlines for imports.
Costco argues that liquidation of February entries occurs around 15 December. Without timely legal intervention, refund eligibility could be permanently lost. Could the Supreme Court ruling come too late for some importers?
The Constitutional Question
Costco’s complaint directly challenges the interpretation of Article I, which grants Congress the exclusive authority to lay and collect taxes, duties, and imposts. The suit contends the president overstepped by imposing tariffs, a core legislative power. Courts have emphasized that executive authority under IEEPA is limited to national emergencies.
Legal precedent reinforces this, with the Federal Circuit calling tariffs “limitless in their scope, amount, and duration.” The question is whether the Supreme Court will uphold Congress’s exclusive role or allow executive overreach.
Chronology Of Key Events
Trump announced tariffs under his “Liberation Day” executive orders on April 2, 2025, implementing rates ranging from 10% on nearly all imports to 145% on certain Chinese goods. Country-specific tariffs included 25% on Mexico and Canada. The collection began on 10 February 2025 under IEEPA.
The Court of International Trade ruled on 28 May 2025 that the tariffs were unlawful, with the Federal Circuit affirming the decision on 29 August 2025. A Supreme Court decision is expected late December 2025 or early January 2026, raising urgent questions for importers like Costco.
Legal Precedent and Lower Courts
The Court of International Trade and Federal Circuit ruled that Trump exceeded IEEPA authority. The Federal Circuit noted that tariffs apply to “nearly all goods into the United States” and affect most nations. They emphasized that Congress, not the president, holds the power to impose tariffs, reinforcing Costco’s legal argument.
This precedent strengthens Costco’s case, but justices raised concerns about the practical implications of invalidating tariffs. Could billions in duties be reimbursed without disrupting trade flows?
Costco’s Specific Arguments
Costco maintains that IEEPA does not explicitly authorize tariffs. Their filing states: “Because IEEPA does not explicitly empower the President to impose tariffs… the Challenged Tariff Orders are invalid, and the defendants lack the authority to enforce and collect them.”
The company argues that executive overreach violates constitutional limits. With $205 billion collected in tariff revenue by October 2025, the stakes are high for both government finances and corporate reimbursement.
Why The December 15 Deadline Matters
Customs entries are liquidated roughly 314 days after importation. For February 2025 imports, the final assessment will occur on 15 December 2025. After liquidation, refunds become difficult or impossible without prior judicial approval, making Costco’s lawsuit urgent.
CBP rejected Costco’s request to extend the deadline. The retailer argues that separate judicial action is necessary to preserve potential refunds, even if the Supreme Court later rules the tariffs unlawful.
Social Media Backlash
Thousands of Trump supporters have announced Costco membership cancellations on X (formerly Twitter). Posts include: “I just cancelled my Costco membership. Screw them!” Influential MAGA figures amplified the boycott, encouraging supporters to shift to competitors like Walmart.
The social media response highlights political tribalism influencing consumer behavior. But how widespread could the cancellations get, and could they affect Costco’s membership base long-term?
Why Members Are Canceling
Costco’s lawsuit is perceived as a challenge to Trump policies, reinforcing an “anti-Trump” narrative. Conservative critics link the action to Costco’s prior DEI initiatives. Republican figures framed it as undermining American manufacturing and presidential authority.
Some see it as a political statement beyond tariffs. Could the cancellations reflect more profound alignment shifts in consumer loyalty tied to political identity?
Why Some Support Costco
Supporters cite potential price relief if tariffs are overturned. Others appreciate shorter lines due to membership cancellations or defend corporate accountability. Lawsuits are framed as a check on executive overreach.
If successful, Costco could restore import pricing, stabilizing member costs. These advocates highlight a counter-narrative to the political backlash dominating social media discussions.
How Costco Is Fighting
Costco filed a declaratory judgment in the U.S. Court of International Trade, challenging the legality of the tariffs and seeking full refunds. They argue that the tariffs violate Congress’s exclusive power to set trade duties.
Coordinated with over 70 similar lawsuits, Costco leverages prior rulings and insights from Supreme Court oral arguments. The legal strategy is designed to preserve refund eligibility while awaiting the SCOTUS ruling.
Tariff Mitigation Tactics
Costco absorbed costs on staple items like bananas and pineapples to protect members. The company made strategic seasonal purchases, rerouted supply chains, increased private-label sourcing, and consolidated suppliers to achieve 30–40% cost reductions.
SKU flexibility and selective price increases helped balance margins. Despite these steps, CFO Millerchip acknowledged ongoing uncertainty in September 2025. What further operational moves might Costco take if tariffs persist?
Supply Chain Impacts
Tariffs affect U.S. imports from China, Mexico, Canada, and Central/South America. Approximately one-third of Costco’s U.S. sales rely on imports, with 8% from China. Elevated tariffs threaten small businesses and suppliers reliant on Costco.
Mitigation strategies reroute goods from high-tariff regions to maintain profitability. Could other retailers face similar operational pressures if the Supreme Court does not rule swiftly?
Financial Stakes
All importers collectively paid ~$90 billion under IEEPA through September, with Costco absorbing a significant portion. U.S. Customs data indicate that $205 billion in total tariff revenue has been collected by the end of October.
Costco’s ability to recover these costs affects profitability, shareholder returns, and employee wages. The upcoming Supreme Court ruling could determine whether millions of dollars are refunded or permanently lost.
Consumer Impact
79.6 million Costco cardholders face potential price fluctuations. Executive members, representing 73% of sales, are disproportionately affected, despite comprising only 47% of total memberships. Core goods prices are already 1.9% above pre-2025 trends.
Tariffs account for roughly 10.9% of headline PCE inflation for the 12 months ending August 2025. If Costco wins, prices could stabilize, benefiting millions of households.
Employee and SMB Considerations
Costco employs approximately 300,000 workers globally, paying an average hourly wage of $26. Tariff recovery could stabilize salaries and employment. Without relief, restructuring or layoffs remain possible.
SMBs, relying on Costco as a supplier or customer, face supply chain disruption and 30–50% tariffs on Chinese imports. A favorable ruling could improve market conditions for thousands of businesses across the nation.
Supreme Court Outlook
The Supreme Court heard oral arguments on 5 November. Justices, including Chief Justice Roberts and Justice Barrett, questioned executive overreach and the practical consequences of invalidating tariffs.
A decision is expected late December 2025 or early January 2026. Outcomes could include full refunds, prospective relief only, or hybrid approaches. The ruling will shape corporate litigation strategy for years.
What’s Next
Costco’s legal action, combined with social media backlash and industry coalition support, keeps the story evolving. Membership cancellations, tariff mitigation, and Supreme Court decisions all intersect to affect the U.S. retail and import landscape.
The coming weeks will clarify whether Costco secures refunds, stabilizes prices, and mitigates financial and operational risks across employees, consumers, and suppliers.
Sources
U.S. Court of International Trade & Federal Circuit Court of Appeals — Official judicial decisions and filings (28 May 2025, 29 August 2025, November 2025)
U.S. Supreme Court — Oral argument transcript, 5 November 2025
U.S. Customs and Border Protection — Tariff collection data and liquidation procedures
Costco Wholesale Corporation — SEC filings and earnings call transcripts, 2025
Federal Reserve & U.S. Treasury — Tariff revenue and inflation data
Major News Organizations — Verified reporting (Reuters, AP, BBC, CNBC, USA Today, Washington Post, Financial Times, Wall Street Journal)