Costco Wholesale has filed a lawsuit against the federal government over tariffs imposed under President Donald Trump’s administration, claiming the import duties were unlawfully applied and seeking to protect its right to a refund if the U.S. Supreme Court ultimately overturns them.
The lawsuit comes from a company whose large scale and loyal customer base have generated significant sales and profits, despite operating far fewer stores than traditional grocery chains.
In Arizona, Costco operates 19 warehouse locations, according to the company’s website. That footprint is relatively small compared with traditional grocery chains in the state, such as Fry’s Food Stores, a Kroger subsidiary that operates well over 100 supermarkets across Arizona.
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But Costco’s smaller store count does little to stop its financial performance. In the fourth quarter of fiscal 2024, Costco reported about $78 billion in net sales during its 16-week period, more than double Kroger’s roughly $34 billion in sales during its 13-week quarter, according to the companies’ respective earnings reports.
As shoppers continue to flock to Costco, the retailer’s legal fight against the Trump administration is likely to continue.
What is the Costco lawsuit about?
In late November, Costco filed a lawsuit in the U.S. Court of International Trade, contending that President Trump misused the International Emergency Economic Powers Act to impose broad tariffs and that importers like Costco are not automatically entitled to refunds without taking legal action, according to the company’s court filing reviewed by USA TODAY.
Costco has not revealed the potential refund amount but stated in court filings that its ability to recover tariff payments could be at risk if Customs and Border Protection completes its tariff calculations before the Supreme Court issues a ruling.
How is Costco prepared to combat Trump’s tariffs?
The lawsuit drew additional attention after Costco nominated Gina Raimondo, a former U.S. commerce secretary under President Joe Biden who has been critical of Trump’s tariffs policy, to its board of directors, according to a company announcement.
The board nomination came less than a week after Costco filed suit against the Trump administration, linking the retailer more closely to a high-profile legal and political fight over U.S. trade policy, according to USA TODAY reporting.
The Supreme Court has not announced a timeline for ruling on the broader tariff case, leaving uncertain whether companies like Costco will ultimately be able to recover millions of dollars in import duties, costs that retailers sometimes pass on to consumers.
Reporting by Rey Covarrubias Jr., Arizona Republic. USA TODAY reporters Jessica Guynn and James Powel contributed to this article.
