Costco's Tariff Lawsuit: Legal Risk Exposure and Cash Flow Vulnerability

Costco is pursuing a two-pronged legal strategy to challenge the tariffs it paid on imports. The retailer filed suit seeking to stop future collections while simultaneously arguing that the underlying authority for these tariffs – the (IEEPA) – is unconstitutional. This dual approach directly contests the legal foundation of the duties imposed on its goods. According to reports.

A critical procedural hurdle for Costco and any similar importers is the strict deadline to claim refunds. The statute governing refunds requires all claims to be submitted by December 15, 2025, a narrow window forcing businesses to act quickly even as the legal battles unfold. Missing this cutoff would permanently forfeit the right to challenge past payments under this specific process. As Bloomberg reports.

However, the viability of obtaining refunds faces a major external uncertainty: a scheduled Supreme Court hearing on November 5, 2025, regarding 's constitutionality. If the Supreme Court rules the act itself is invalid, this could fundamentally undermine any future refund claims based on challenging the tariffs' legality, regardless of Costco's own lawsuit outcome. The timing and potential ruling create significant risk for refund eligibility. According to legal analysis.

This litigation uncertainty means that even importers acting within the refund claim deadline face potential denial if the Supreme Court's decision renders the legal basis for the tariffs unconstitutional entirely. The outcome of both the lower court case and the Supreme Court review will determine whether past payments can be recovered.

Regulatory Compliance Burdens and Recordkeeping Requirements

The path to reclaiming improperly paid tariffs hits immediate bureaucratic roadblocks. Treasury Department guidelines make clear that refund claims are largely non-voluntary processes – businesses must submit detailed documentation to initiate a review, not rely on automatic rebates. This places heavy administrative burdens on companies, requiring meticulous recordkeeping of import dates, duty payments, and tariff classifications for every shipment subject to potential refunds. The compliance burden isn't theoretical; have already rejected extension requests for filing deadlines on tariff refund claims, escalating the pressure on affected businesses to navigate these complex procedures before losing their eligibility entirely.

Compounding these procedural hurdles, ongoing supply chain disruptions create operational chaos that further strains compliance capabilities. Manufacturers face challenges tracking goods through increasingly fragmented global logistics networks, making it difficult to maintain the detailed shipment records required for refund claims. Customs officials have threatened to reject claims based on insufficient documentation, particularly for shipments affected by port congestion or transportation delays. This creates a double bind: companies must meet strict documentation standards while operating in an environment of unpredictable supply chain performance. For many businesses already grappling with inflationary pressures and reduced cash flows, these regulatory demands represent a significant financial and operational strain that could deter legitimate refund attempts altogether.