Costco has filed a lawsuit against the Trump administration, demanding refunds for tariffs it paid this year, highlighting a critical constitutional battle over presidential power that could cost taxpayers hundreds of millions if the Supreme Court rules against executive authority.
Story Snapshot
- Costco sues the Trump administration for tariff refunds before the December 15 liquidation deadline
- Lower courts ruled Trump lacked constitutional authority to impose tariffs under emergency powers
- Supreme Court appears skeptical of administration’s tariff authority during November oral arguments
- Dozens of companies are filing similar lawsuits to protect refund rights worth hundreds of millions
Constitutional Authority Under Supreme Court Review
The retail giant filed suit in the U.S. Court of International Trade on November 28, 2025, seeking protection against a December 15 deadline that could permanently block refunds.
The case centers on Trump’s use of the International Emergency Economic Powers Act to impose reciprocal tariffs on trading partners and fentanyl tariffs on Canada, China, and Mexico.
Two lower courts have already ruled these actions exceeded presidential authority, with the Federal Circuit Court stating tariffs represent “a core Congressional power” under the Constitution.
Here's what is really happening.
Costco wants to preserve its eligibility for tariff refunds IF the SCOTUS eventually rules the tariffs are illegal.The only way to preserve that right is to file suit for a refund prior to Dec. 15th.https://t.co/Bb8zv9QTUE
— Brick Suit (@Brick_Suit) December 2, 2025
Economic Stakes and Administrative Response
The Trump administration faces potential refunds of hundreds of millions in collected tariffs if the Supreme Court upholds lower court rulings. White House spokesman Kush Desai emphasized the “enormous economic consequences” of invalidating what he called “President Trump’s lawful tariffs.”
The administration has expedited the Supreme Court appeal, though the timeline for a final decision remains unclear. During the November 5 oral arguments, a majority of justices appeared skeptical of the administration’s constitutional arguments.
Corporate Legal Strategy Against Liquidation Deadline
Costco’s lawsuit specifically targets U.S. Customs and Border Protection’s denial to extend the December 15 liquidation date, which finalizes tariff computations.
The company argues that without judicial intervention, it risks losing refund rights even if the Supreme Court eventually rules the tariffs unconstitutional.
Costco noted that “not all liquidations are protestable” and importers may lack legal recourse once duties are liquidated, regardless of subsequent court rulings on tariff legality.
Broader Industry Impact and Presidential Power Limits
Dozens of companies have filed similar protective lawsuits, demonstrating widespread business concern over executive tariff authority. The cases highlight fundamental questions about the separation of powers and constitutional limits on presidential emergency declarations.
The Federal Circuit’s 7-4 ruling emphasized that Congress holds exclusive constitutional authority over tax policy, including tariffs. This legal challenge represents a significant test of the limits of executive power that conservatives traditionally support in defending constitutional boundaries against government overreach.
