Costco Sues Over IEEPA Tariffs — What This Means for Importers Seeking Refunds
Introduction: A Major Retailer Enters the Tariff Refund Fight
Last week, Costco Wholesale Corporation filed suit in the U.S. Court of International Trade (“CIT”) challenging the legality of tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). The lawsuit seeks refunds of previously paid IEEPA duties. Costco’s complaint comes at a critical moment: the Supreme Court heard argument on November 5 in Trump v. V.O.S. Selections—a case squarely raising the issue of whether IEEPA authorizes tariff imposition at all—and a decision is expected soon.
In the meantime, Costco faces rapidly approaching liquidation deadlines for entries subject to IEEPA tariffs, with some entries already liquidated. “Liquidation” is the process by which Customs and Border Protection (“CBP”) finalizes the duties owed on an imported entry. Once an entry liquidates, the duty amount becomes final, and an importer generally cannot recover a refund unless it has filed a timely protest or otherwise preserved its rights. Costco’s filing reflects the growing urgency among importers to preserve potential refund rights while the legality of these tariffs remains unresolved.
Costco’s suit highlights several issues importers should be watching closely, including how liquidation deadlines may affect refund eligibility, why a Supreme Court decision alone may not guarantee recovery of unlawfully collected IEEPA duties, and what steps companies might consider now to protect their interests.
For the launch of Tariff Tactics, HNRK’s new blog focused on emerging litigation involving tariffs, customs duties, and trade-related executive action, we take a closer look at Costco’s filing and the broader implications for businesses subject to IEEPA tariffs.” As a sister to HNRK’s Coverage Corner, Tariff Tactics will offer concise analysis of significant disputes and practical insights for importers navigating an increasingly complex tariff and trade-enforcement landscape
I. Brief Context: What Are IEEPA Tariffs?
IEEPA authorizes the President to regulate certain economic transactions during a declared national emergency, including blocking or prohibiting transfers of property in which a foreign country or national has an interest. Historically, IEEPA has been used to freeze assets or restrict financial activities—not to impose tariffs. While tariff-adjustment powers were invoked under IEEPA’s predecessor statute, e.g., President Nixon’s Proclamation 4074, the ability to impose new tariffs under IEEPA remains contested.
Beginning in February 2025, the Administration invoked IEEPA as the authority for a far-reaching series of tariff actions on imports from Canada, Mexico, China, and dozens of other countries. These IEEPA tariffs—substantial and frequently modified—have affected nearly every importer bringing goods into the United States.
Whether IEEPA authorizes such emergency-based tariffs is now the central question before the Supreme Court in Trump v. V.O.S. Selections.
II. IEEPA vs. Section 301: Why Importers May Be Confused
IEEPA tariffs are often discussed alongside tariffs imposed under Section 301 of the Trade Act of 1974 (“Section 301”). The two regimes serve different purposes and follow different procedures. Section 301 authorizes duties in response to unfair trade practices, most notably those attributed to China beginning in 2018. These administratively imposed tariffs have been the subject of extensive litigation before the CIT.
By contrast, IEEPA authorizes emergency executive remedies that historically have not included tariff-imposition authority. The two sets of tariffs are often mentioned together because both were major pillars of Trump-era trade policy and have generated significant tariff litigation, but they arise from fundamentally different frameworks.
As a result, refund opportunities and litigation strategies that applied to Section 301 duties do not necessarily translate to IEEPA duties—a distinction highlighted by Costco’s filing and the Supreme Court’s review of the President’s IEEPA authority.
III. The Costco Lawsuit: A High-Profile Challenge to IEEPA Duties
Costco’s complaint, filed on November 28 in the CIT, seeks refunds of IEEPA duties the company has already paid on affected entries. Costco alleges that the President exceeded statutory authority in imposing IEEPA tariffs, advancing many of the same legal arguments currently before the Supreme Court. Notably, the CIT previously held that IEEPA does not authorize tariffs—a ruling the Federal Circuit affirmed. See V.O.S. Selections, Inc. v. Trump, 149 F.4th 1312 (Fed. Cir.), cert. granted, No. 25-250, 2025 WL 2601020 (U.S. Sept. 9, 2025).
The company’s lawsuit seeks a declaratory judgment that the IEEPA tariffs are unlawful as applied to its imports and an order requiring the government to suspend liquidation of Costco’s IEEPA entries and refund Costco’s previously paid IEEPA duties. Here, Costco alleges that many of its entries will liquidate “as early as December 15, 2025,” and that one entry had “already liquidated” as of the filing. As noted above, once an entry liquidates, an importer generally cannot recover a refund unless it has acted to preserve its refund rights.
Costco alleges it requested the CBP extend the liquidation date for its IEEPA entries. It further alleges the “CBP denied that request” on November 18, 2025, leaving the company at risk of “imminent and irreparable harm.” Thus, Costco seeks injunctive relief suspending liquidation while its challenge proceeds. The timing of Costco’s complaint illustrates the practical problem importers now face with rapidly approaching liquidation deadlines for IEEPA tariff entries.
Costco’s filing underscores how the interplay between liquidation timing and the Supreme Court’s forthcoming decision may require importers to consider judicial action now, rather than wait for a Supreme Court ruling. Importers whose entries liquidate before a ruling may be unable to recover duties even if the IEEPA tariffs are ultimately invalidated
IV. High-Level Implications: What If the Supreme Court Invalidates IEEPA Tariffs?
The Supreme Court’s forthcoming decision in Trump v. V.O.S. Selections may determine whether IEEPA authorizes the President to impose tariffs at all. A holding that IEEPA does not authorize tariff imposition will raise immediate questions for importers wanting a refund of substantial IEEPA duties paid over the past year.
But even a ruling invalidating IEEPA tariffs would not guarantee refunds. As Costco’s complaint illustrates, the ability to recover duties often turns on whether entries have liquidated and whether importers have preserved their rights through available administrative or judicial mechanisms. Companies whose entries liquidate before the Court issues any decision may have limited options for recovering duties, even if the tariffs are ultimately held unlawful.
A decision invalidating IEEPA tariffs could also prompt the United States Trade Representative to consider administratively reimposing similar tariffs under statutes like Section 301. Any such action would require a formal notice-and-comment process and could delay implementation of new tariffs, a subject we will likely explore in a future post.
V. Key Takeaways for Importers
Costco’s lawsuit highlights the parallel timing pressures many importers now face. Administrative liquidation deadlines continue to run while the Supreme Court considers IEEPA tariff authorization. Companies may need to evaluate their options now—before the Court rules—to ensure they do not lose refund rights through entry liquidation. Importers should be assessing which entries remain open, what administrative steps remain available, and whether judicial relief may be necessary to preserve potential claims.
Costco’s complaint also underscores how different tariff regimes impact litigation responses. Strategies that proved effective in litigation over Section 301 duties (such as Administrative Procedure Act challenges) may not apply to IEEPA tariff litigation.
As the Supreme Court’s decision approaches, we will continue to monitor developments and analyze what they mean for companies navigating IEEPA duties and related refund issues. Future posts will address potential refund pathways, the mechanics of liquidation and protest, and what importers can expect if the Administration seeks to reimpose tariffs through agency-led processes.
Conclusion
Costco’s challenge arrives at a defining moment for IEEPA tariffs, with the Supreme Court poised to clarify the limits of the President’s emergency economic powers. As importers navigate the overlapping pressures of liquidation deadlines and an uncertain legal landscape, the coming weeks will be critical. Tariff Tactics will continue to track these developments and provide timely analysis of the implications for companies confronting IEEPA duties and related refund questions.