Costco just took a direct step against the federal government as it contested President Donald Trump’s tariff executive order in court.
The retail giant filed a lawsuit that targeted the administration’s use of the International Emergency Economic Powers Act (IEEPA), arguing that the statute never granted the president the authority to levy the so-called “reciprocal tariffs.” The filing placed Costco among the most prominent companies challenging the policy.
Although the litigation emerged late in the broader legal fight, Costco asserted that the timing mattered. The Supreme Court recently heard arguments in several related cases, and the justices appeared to question the government’s defense of the tariffs. As a result, many observers predicted that the Court could eventually invalidate the orders.
Costco targets Trump’s tariff authority
Costco lodged its complaint with the U.S. Court of International Trade. The case named the United States, U.S. Customs and Border Protection (CBP), and CBP Commissioner Rodney S. Scott as defendants. In April, Trump issued the executive order that invoked IEEPA to justify a shifting series of tariffs. Since that announcement, he has flip-flopped tariff measures, constantly changing them without clear reasoning behind the changes. Costco argued that the law never allowed such actions.
Costco’s complaint stated, “Because IEEPA does not clearly authorize the President to set tariffs, the Challenged Tariff Orders cannot stand and the defendants are not authorized to implement and collect them.”
Notably, several other large companies have taken similar steps against Trump’s tariffs. Revlon, EssilorLuxottica, Kawasaki, Bumble Bee, and Yokohama Tire each filed suits that questioned the same legal basis. Lower courts had rejected the administration’s interpretation of IEEPA, but those courts permitted the tariffs to remain in place during the ongoing appeals.
Anticipated Supreme Court action prompted the filing
Meanwhile, Bloomberg reported that Costco acted because a Supreme Court ruling could create uncertainty about refunds for businesses that had paid the duties. The company said it needed a court order now to preserve its ability to recover money later.
Furthermore, Costco pointed out that “Customs and Border Protection denied its request to extend the schedule for finalizing tariff determinations under Trump’s use of the International Emergency Economic Powers Act,” which “could jeopardize its ability to seek full refunds in the future,” according to the report by Bloomberg.
Even though Costco did not disclose the total amount it paid in tariffs this year, it stood out as one of the largest retailers to enter the legal dispute. Additionally, the filing appeared aimed at ensuring the company did not face administrative or procedural barriers if the Supreme Court eventually struck down the tariffs.
Social media reacts to the move
On social media, Costco shoppers were divided over the move. On X, many celebrated the move, with one saying, “WE need more of this. Other companies need to do the SAME thing.”
“When even Costco is done with Trump’s tariffs, you know the policy was a bulk-sized failure,” writes @theophilus367.
However, others didn’t feel bad for the corporation. “Considering Costco probably makes 1000% profit on all their Chinese crap, I don’t think they’re hurting,” writes one X user.
Another user sarcastically adds, “You mean a giant corporation wants to wriggle out of paying taxes? Oh gee! This has literally never happened before!?”
Others point to the lack of price increase of Costco’s hot dogs, as well as the company’s current stock returns.
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