Costco has joined a fast-growing list of companies suing the Trump administration to ensure they are entitled to refunds if the US Supreme Court (SCOTUS) strikes down the US president’s global tariff policy.
What did Costco’s lawyers say?
Lawyers for Costco said the lawsuit, filed Nov. 28, was the result of uncertainty over a refund guarantee for any companies that pay additional tariffs if SCOTUS rules Trump’s tariffs illegal.
However, the lawsuit did not specify how much the company had to pay because of the additional tariffs imposed by the Trump administration.
The company said the court’s intervention was first necessary after U.S. Customs and Border Protection denied its request to extend the timetable for finalizing the tariffs. That could jeopardize the company’s chances of getting full compensation in the future, Bloomberg reported.
Dozens of companies have filed lawsuits at the U.S. Court of International Trade since late October challenging Donald Trump’s use of economic emergency powers to impose sweeping global tariffs. Now Costco, the nation’s largest chain of warehouse clubs, has decided to follow suit.
Costco, one of the nation’s largest companies, has jumped into the ring in a case led by smaller businesses and Democratic state officials.
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Arguments regarding Trump’s tariffs were heard by the US Supreme Court on November 5. The case was put on an accelerated schedule by the presiding judges, who, however, did not specify when they intend to issue a ruling on the matter. The companies, meanwhile, are suing the Trump administration to avoid uncertainty about their right to a refund if the court ruling goes against the US president.
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What did the White House say about tariffs?
Kush Desai, a White House spokesman, said in a statement: “The economic consequences of President Trump’s disregard for the statutory tariffs are enormous, and this lawsuit underscores that fact. The White House looks forward to a swift and orderly resolution of this matter by the Supreme Court.”
Judges are skeptical of Trump’s tariffs
Although Trump’s tariffs generate tens of billions of dollars a month, judges are skeptical of their legality. Lower federal courts have already ruled against Trump’s tariffs, but have allowed the government to continue enforcing them pending a Supreme Court ruling.
Some major companies, in addition to Costco, that have filed lawsuits against the US government include Revlon Consumer Products Corp and Kawasaki Motors Manufacturing Corp.
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As the tariffs go through a series of rate changes following Trump’s negotiations with several countries, their overall impact has been more muted than initially expected.
What Costco is doing to mitigate the effects of the tariffs
Costco said the tariffs primarily affect its non-food products and that it has redirected some products to markets outside the US, ordered more inventory to hedge its position against the new charges, and bought goods from fewer suppliers with consolidated purchases. There was also a complete change of merchandise whenever items were too expensive.
The company’s chief financial officer, Gary Millerchip, previously told Bloomberg News, “We’re doing everything we can,” adding, “Whether it’s working with suppliers to find efficiencies that offset the impact of the tariffs, or whether we buy with them frequently to different countries.”
Costco said it is keeping prices of bananas and pineapples imported from Central and South America steady, given their importance to customers. On the other hand, the prices of flowers, which are less essential, have increased.
