Costco has filed suit at the Court of International Trade challenging the legality of tariffs imposed under the International Emergency Economic Powers Act. The company contends the president exceeded emergency authorities by enacting duties on imports from multiple countries. The case seeks a declaration that all IEEPA-based tariffs are unlawful.

Over 1,000 retailers joined Costco’s legal challenge, while Target and Walmart opted out of the lawsuit. Costco also retained its diversity, equity and inclusion policies after an overwhelming board vote, in contrast to peers that removed such language. This stance highlights Costco’s readiness to defend its corporate policies and oppose federal actions.

Oral arguments in November went poorly for the administration, driving prediction markets to assign roughly 70% odds of tariff reversal by the Supreme Court. A favorable ruling could lower import costs for Costco and enable margin or price adjustments. A loss would sustain elevated duties and keep cost pressures on the warehouse club.