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A major part of Donald Trump's campaign before he took office for his second term as president of the United States was imposing tariffs on numerous countries, hoping to increase revenue for the U.S. As of Friday, November 28, 2025, Costco (which is also known for its excellent gas prices) filed a lawsuit with the Court of International Trade. The lawsuit claims the retailer is entitled to a full refund on all the revenue it has lost since the tariffs were imposed, arguing that the tariffs collected under the International Emergency Economic Powers Act (IEEPA) are unlawful.
According to the paperwork filed with the U.S. Court of International Trade (PDF), the lawyers claim, "IEEPA grants the president certain power, but they 'may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared for purposes of this chapter and may not be exercised for any other purposes." Despite seeking a refund, Costco doesn't say how much the tariffs have cost it.
During an earnings call in May 2025, Costco's Chief Financial Officer, Gary Millerchip, told investors that the company wouldn't be raising prices on some fresh food items despite taking a big hit "because they are key staple items," per NBC News. Before Costco ever filed its lawsuit, the tariffs were already being challenged. It's uncertain how the legal battle will go, but Supreme Court arguments from November 2025 seemed to indicate that the majority of justices weren't seeing it the same way as the administration.
Trump's tariffs are already in hot water
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The reciprocal tariffs that the president has imposed aren't just affecting Costco. North American automakers have lost billions of dollars since the law went into effect, so it should come as no surprise that a lawsuit landed in the U.S. Supreme Court. Justices listened to oral arguments on the legality of the tariffs enacted under the IEEPA on November 5, 2025, prompting some hard-hitting questions from the judges. Chief Justice John Roberts is on record saying that imposing taxes — which a tariff is — on Americans is a power that lies with Congress alone, not the Executive Branch.
Trump cited the IEEPA to impose these tariffs. That's a 1977 law that says (via Congress), "IEEPA empowers the President to exercise an array of economic powers 'to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.'"
However, tariffs aren't mentioned anywhere in the law, and it was devised as a way to limit a president's power. It's not just the liberal justices, as the majority of the general public might expect, who are questioning the administration's case. Conservative justices like Neil Gorsuch and Brett Kavanaugh have pushed back on the government's arguments, as well. The Supreme Court has until July 2026 to issue a ruling.
