Costco Wholesale Corp. filed a lawsuit on December 1, 2025, in the U.S. Court of International Trade seeking refunds of tariffs imposed under President Donald Trump’s International Emergency Economic Powers Act (IEEPA). The complaint argues that the tariffs are unlawful and requests protection against future collections while the Supreme Court considers the case’s legality.
The filing joins a coalition of retailers and manufacturers—including Kawasaki Motors, Bumble Bee Foods, Revlon, and EssilorLuxottica—that contend IEEPA does not authorize tariff imposition. The Supreme Court heard arguments in November 2025 and is expected to decide soon. Import entries are set to liquidate on December 15, 2025, after which companies lose the ability to recover tariffs, making the lawsuit urgent for all affected importers.
Costco’s complaint does not disclose the exact amount of tariffs paid, but the company has indicated that tariffs have added a modest cost burden, given that only about one‑third of its U.S. sales come from imported products. The lawsuit could save the retailer a significant amount if the court rules in its favor, potentially reducing costs that would otherwise erode margins.
Costco reported strong Q4 2025 earnings on September 25, 2025, with net sales up 8.0% to $84.4 billion and net income rising to $2.61 billion ($5.87 per diluted share). The earnings beat analyst expectations by $0.06 per share, driven by robust membership renewal rates (89.8% worldwide) and efficient supply‑chain management that kept gross margin at 11.13%. Management emphasized that the company is maintaining competitive pricing while investing in local sourcing and the Kirkland brand to mitigate tariff exposure.
The lawsuit underscores the broader risk that tariff uncertainty poses to Costco’s cost structure. While the retailer’s financial health remains strong, the potential for additional tariff costs could pressure margins if the Supreme Court upholds the tariffs. The legal challenge, coupled with Costco’s proactive mitigation strategies, signals the company’s intent to protect its pricing power and preserve member value amid regulatory volatility.
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