Costco Is Coming for Trump. It Wants Its Money Back.

Like those that came before it, Tuesday’s lawsuit argued that the IEEPA tariffs went beyond what Congress had authorized when it enacted the Cold War–era statute. Its sweeping language has been used in times of declared national emergency to freeze foreign assets and seize foreign-owned property. No previous administration, however, has used it as a revenue-raising mechanism before. “The text of IEEPA does not use the word ‘tariff’ or any term of equivalent meaning,” Costco noted in its complaint. “IEEPA was first enacted in 1977 and has been amended several times, but it has never been amended to authorize, or used by any other president to impose, tariffs.”

The Trump administration has claimed in other cases that the law’s authority to “regulate … importations” could be stretched to cover tariffs. It has also insisted that it would refund American importers if the tariffs were held to be illegal. This concession persuaded the Federal Circuit Court of Appeals to not block the tariffs with a preliminary injunction, thereby allowing the government to keep collecting them during litigation.

Costco argued that its new lawsuit was necessary to preserve its ability to recoup the tariffs that it has already paid. “Even if the IEEPA duties and underlying executive orders are held unlawful by the Supreme Court,” the company said in its complaint, “importers that have paid IEEPA duties, including [Costco], are not guaranteed a refund for those unlawfully collected tariffs in the absence of their own judgment and judicial relief.”