Costco sues US govt for refund if tariffs ruled illegal
Retail giant Costco has joined a growing list of companies suing the US government for refunds on tariffs it paid if the US Supreme Court rules that the levies were imposed illegally.
The Supreme Court heard arguments last month over whether President Donald Trump was within his rights to unilaterally impose tariffs under the Emergency Powers Act.
"The economic consequences of the failure to uphold President Trump's lawful tariffs are enormous, and this suit highlights that fact," White House spokesperson Kush Desai said in a statement.
Starting in April, Trump imposed minimum 10 percent tariffs on most nations, then added significant additional tariffs — up to 145 percent — on countries such as China, Canada and Mexico under the guise of a "fentanyl emergency."
China responded by imposing tariffs of 125 percent on US imports and stalling the purchase of US soybeans. The two sides have since held several rounds of trade talks, and the additional US duties have been reduced to 30 percent.
Costco argued in its lawsuit — filed on Friday — that while the Emergency Powers Act allows the president to bypass Congress to enact laws that regulate or prohibit foreign transactions during an "unusual and extraordinary threat", it doesn't specifically mention tariffs or duties, a power delegated by the US Constitution to Congress.
However, the Trump administration has argued that imposing tariffs and other financial levers would fall under presidential power during an emergency.
But this didn't seem to sit well with the justices.
"The Constitution is structured so that if I'm going to be asked to pay for something as a citizen, that it's through a bill that is generated through Congress," Justice?Sonia Sotomayor said during oral arguments.?
In filing its suit, Costco joined dozens of retailers such as Revlon, Kawasaki Motors, Ray-Ban, Bumble Bee Foods and Yokohama Tires, which have also sued the government in hopes that the tariffs would be struck down.
Costco did not specify the amount of money it would ask to have refunded, but it filed the case to make it eligible to do so, since the company is "not guaranteed a refund for those unlawfully collected tariffs in the absence of their own judgment and judicial relief", according to its court filing.
Estimates using customs data put the total tariffs collected so far under Trump's emergency measures at about $90 billion.
Costco said that the tariffs have impacted its business.
"We continue to work closely with our suppliers to find ways to mitigate the impact of tariffs, including moving the country of production where it makes sense," Costco CFO?Gary Millerchip?said in a conference call in September. Costco's measures included relying more on local sourcing and its Kirkland brand.
Rulings against Trump's unilateral imposition of tariffs have been made by the US Court of International Trade and the US Court of Appeal. The Supreme Court is now hearing the case on an accelerated basis, but has not said when it would release its decision.
