Costco has the resources to sue the Trump administration over tariffs. Not all companies are up for the fight.
Costco sues Trump administration for tariff refunds
Popular wholesale retailer Costco has sued the Trump administration over tariffs. They are seeking a refund of the customs duties they paid.
As the Supreme Court considers a challenge to President Donald Trump’s tariffs, U.S. business owners are waiting to see what will happen to the money they spent importing goods and whether they will be able to offer customers reprieve from price increases.
Costco recently filed a lawsuit against the Trump administration seeking to secure a “full refund” if the Supreme Court invalidates tariffs imposed under the International Emergency Economic Powers Act of 1977 in a separate case heard in November.
This is the latest lawsuit by retailers seeking refunds from the government. Other companies listed include Bumblebee Foods, Essilor Luxottica, Kawasaki Motors, Revlon and Yokohama Tire, according to court records.
The Justice Department said in a legal brief that if the tariffs are determined to be illegal, importers would likely be entitled to a refund. Treasury Secretary Scott Bessent said in September that the department would need to return “approximately half of the tariffs.”
It remains unclear how U.S. Customs and Border Protection will handle the large-scale refund process, and some companies have begun filing lawsuits ahead of the ruling to preserve their rights to refunds in case the Supreme Court limits refunds to companies that have filed lawsuits.
That legal action comes at a price. Drew DeLong, director of corporate politics at Carney Foresight, said suing the presidential administration goes beyond legal costs and could upset clients and damage relationships with the federal government.
“There’s so much uncertainty right now that the calculation is, is filing a lawsuit worth it to increase the certainty that we’re in a better position if this action is taken,” DeLong said.
This is not a battle that every company can take on.
“Companies that don’t have the infrastructure in place to navigate this environment proactively in terms of government involvement have a less competitive advantage than those that are prepared,” DeLong said. “In the same way that we’re talking about the K-shaped economy right now in terms of consumer upside and downside strength, I think we’re seeing very similar trends emerge among those who have the infrastructure to navigate this environment.”
How tariffs led to layoffs at small businesses
Melkon Khosrovian, a spirits maker and co-founder of Greenbar Distillery in Los Angeles, said his company was paying a 25% tariff at the beginning of 2025. It jumped to 170% at one point this year, but is now back to 55%.
“This is, you know, much better than $170, but it’s still a significant amount of money for us,” Kosrovian said.
He said his team is still tallying up the total amount of tariffs the company will owe this year, but he expects it will pay between $75,000 and $125,000, up from the $25,000 to $50,000 he said it paid each year before the second Trump administration.
Kosrovian said the distillery sources all the freshest ingredients possible from local farms, but there are some that aren’t realistically available from U.S. producers, such as juniper berries, cinnamon, cloves, nutmeg and coffee. He said the company also decided to import automatic bottling equipment this year “to do one thing we can do, which is to keep labor costs down.”
He said the company is preparing to lay off both full-time and part-time employees as a cost-cutting measure, in part because it believes consumers cannot absorb any price increases in the current economic climate. Potential layoffs are being openly discussed among the 15 staff.
“At first, our staff thought that the government that was importing the product was going to pay the tariffs. We had to say, ‘No, no, no, this is the bill,'” Kosrovian said. “Our entire team went through many drills to find cost savings. In the end, we couldn’t find enough savings.”
How tariffs led to higher prices for other companies
Clifford Thompson, president of Thompson Traders, said his family business in Greensboro, North Carolina, which sells sinks, bathtubs and custom range hoods, is in debt because of the tariffs and is driving up prices.
For Thompson, the challenge isn’t sourcing the materials, he said, but the craftsmanship. He said the company’s handmade products cannot be manufactured in the United States and can still be sold at a fair price. He said the company doesn’t have the financial ability to train employees to do the same job, and estimated that even if it could, the process would take about three years.
“We haven’t really focused on” the amount the company has paid in tariffs so far, he said. He said the company will pay more than $1 million in tariffs this year.
“We went from a year where we were probably going to be profitable to a year where we were going to break even at best,” Thompson said. “It’s not completely sustainable. We’ll figure it out. Thankfully, we’ve been in business for a while. I think this is pretty detrimental to a young company.”
Small and medium-sized businesses hope to gain from the courts
Mr. Khosrovian and Mr. Thompson’s companies are two of hundreds of companies that are part of We Pay the Tariffs, a coalition supported by Trade Partnership and other pro-trade organizations. The coalition filed an amicus brief with the Supreme Court asking the justices to uphold the lower court’s ruling and deem the tariffs illegal.
Khosrovian said he hopes the Supreme Court will invalidate the tariffs and end the case. In his “fantasy scenario,” his company would receive a refund. If that happens, he said, the company would love to bring back some of the employees it plans to lay off, but “we’ll be very cautious because we don’t know what’s going to happen.”
Mr Thompson said that if the company were to receive a refund, it would be used to repay the debt incurred to pay the tariffs, but the company would also likely “keep it in the bank for a while to see how things go”.
DeLong said their alarm is not unreasonable and people shouldn’t assume the Supreme Court’s decision signals an end to tariffs. The Trump administration has several options for implementing similar tariffs in other ways.
“As far as I’m aware, I don’t think there’s anyone in this administration that says tariffs aren’t here to stay,” DeLong said. “They have clearly stated that this is the foundation, and I don’t think losing IEEPA will thwart the intent of what they have developed.”
For now, uncertainty remains.
“What I really want is clarity and stability around that: ‘Look, here are the numbers, this is what’s going to happen in the future,’ so we can just focus on running the business,” Thompson said.
Broader tariff case could have even bigger impact on consumers
Amanda Oren, RELEX’s vice president of industry strategy for food, said that while some refunds could be trickled out to customers if approved, the refunds are unlikely to have a major impact on consumers.
Broader legal challenges to IEEPA tariffs could become more important to consumers, he said.
Katie Thomas, who heads the Kearney Consumers Association, told USA TODAY in September that if IEEPA tariffs are determined to be illegal, some companies may try to lower prices, and receiving refunds could lead to fewer layoffs.
Its wide-ranging legal challenges are playing out in court. The Supreme Court has accelerated the case, hearing oral arguments on November 5, but has not said when it will rule.
Contact Rachel Barber rbarber@usatoday.com X Follow her at @rachelbarber_
