News / Costco joins importers seeking refund of tariffs – but still no guarantees

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Costco is seeking to get ahead of the US Supreme Court (Scotus) decision on the legality of the Trump administration’s tariff policy, lodging a case with the US Court of International Trade for a full refund, joining a throng of other importers taking such action.

Filed on Friday, the complaint from the world’s third-largest retailer stressed that the action was needed because, even if Scotus does deem the tariffs unlawful, importers that have already paid tariffs “are not guaranteed a refund”.

The claim says Costco is seeking “(i)a declaration that the IEEPA [International Emergency Economic Powers Act] duties are unlawful; (ii) an injunction preventing defendants from imposing further duties on it under the executive orders challenged in this lawsuit”.

It wants a “full refund from [US Customs and Border Protection (CPB)] of all IEEPA duties it has already paid to the US as a result of the executive orders challenged in this lawsuit, as well as those it will continue to pay”.

The timing of the complaint has coincided with concerns that CBP has already started the process of liquidation of duties paid earlier this year, with the filing noting as of Friday that the CBP had already liquidated one importer’s filing, preventing it claiming a refund.

Based on the declared value and applicable duty rates for each shipment at the time of entry, liquidation is a process CBP undertakes to finalise the duties, fees, and taxes owed on imported goods – a determination all but binding.

While that process typically takes 10 months, it is possible for CBP to reach a determination in a matter of weeks, and several law firms have warned importers to delay the liquidation process should the Supreme Court decision fall in their favour.

Costco’s own request for CBP to extend the liquidation process for the duties paid was denied and the retailer said it was also intending to “file a motion for a preliminary injunction to suspend liquidation”.

With its Friday filing, Costco joined 17 other importers that have lodged similar complaints with the US Court of International Trade against CBP, which claimed that by September it had collected some $90bn in duties.

And yesterday a further six importers filed claims with the trade court, amid what appears increasing expectation that Scotus will side with importers, determining the Trump administration wrongly interpreted IEEPA to give the president – instead of Congress – authority to set tariffs.

Pete Mento, director of global trade advisory services at Baker Tilly, said he was “85%” certain Scotus would side with importers, but said he remained uncertain over what this would mean for those hoping for refunds.

“Will we have to file suit to get the refunds past 180 days? Here is what I am confident in saying though, customs house brokers are in no position to process all these petitions, and if you haven’t already started the document process, you’ll wish you had,” he said.

“First ones in will be the first ones refunded, and that will likely take well over a year to process. I feel like I’m shouting at the captain of the Titanic that ‘there’s an iceberg ahead’, and nobody is listening.”

Trade lawyer Sandler, Travis & Rosenberg (STR) said there were actions that could be taken, urging importers exposed to tariffs to identify all affected entries and to begin requesting extensions for liquidation, with CBP permitted to grant an extension of up to three years.

However, given CBP’s refusal to Costco’, there are questions over whether others will be successful; STR noting that once liquidation becomes final, “CBP will likely contend that regardless of the ultimate outcome of the litigation, no refund of duties paid is required”.