Dive Brief:
- Costco is suing the Trump administration, seeking a refund on the tariffs it paid after President Donald Trump imposed levies globally this year under a self-declared national emergency.
- The retail giant acknowledged that the U.S. Supreme Court would eventually rule on the tariffs' legality, but said the suit was necessary to prevent U.S. Customs and Border Protection from finalizing the company's payments on Dec. 15, which would make it more difficult to obtain refunds.
- "Plaintiff seeks relief from the impending liquidations to ensure that its right to a complete refund is not jeopardized," per the lawsuit filed on Nov. 28 in the U.S. Court of International Trade.
Dive Insight:
Costco joined Revlon Consumer Products, Bumble Bee Foods and other companies seeking tariff refunds based on arguments similar to those made earlier this year by seven small businesses and a dozen states challenging the legality of Trump's tariffs. The Supreme Court is weighing those challengers' arguments in two consolidated cases, Learning Resources Inc. et al v. Trump and V.O.S. Selections Inc. et al v. Trump.
On Nov. 5, the Supreme Court heard oral arguments for the combined cases, focusing on the scope of presidential power and the constitutional limits on imposing levies. Questioning from the justices suggested skepticism toward the Trump administration's claims that the 1977 International Emergency Economic Powers Act allowed the president to impose unrestricted levies after declaring a national emergency, even though the act doesn't explicitly grant that power.
The Supreme Court is expected to rule in the near future, but Costco had to sue in advance to make a refund possible, according to the company's suit.
"This separate action is necessary, however, because even if the IEEPA duties and underlying executive orders are held unlawful by the Supreme Court, importers that have paid IEEPA duties, including Plaintiff, are not guaranteed a refund for those unlawfully collected tariffs in the absence of their own judgment and judicial relief," per the lawsuit.
Costco is asking the USCIT to issue an injunction preventing the administration from imposing further IEEPA duties. The company also seeks a full refund of the tariffs it has already paid and those it will continue to pay and said it will file for a preliminary injunction to suspend impending tariff payments.
Experts have told sister site Supply Chain Dive that Customs and Border Protection could face an unprecedented wave of tariff refund requests if the Supreme Court strikes down the levies and deems refunds necessary. The total amount of IEPPA levies collected this year by the U.S. was expected to reach $108 billion by the end of October, according to an analysis by PricewaterhouseCoopers.
