Costco is facing a proposed nationwide class action lawsuit seeking refunds for tariff payments passed on to customers, following a Supreme Court ruling that found the Trump administration exceeded its authority in imposing tariffs under the International Emergency Economic Powers Act (IEEPA). The suit was filed in a federal court in Illinois by a Costco customer on Wednesday, requesting that any tariff refunds Costco receives be returned to consumers who paid higher prices due to those tariffs.
The lawsuit argues that Costco, which is among over 2,000 companies pursuing tariff recovery through the U.S. Court of International Trade, has made no binding commitment to reimburse consumers directly. Instead, the suit criticizes Costco’s promise of possible future price reductions or value improvements for an unspecified group of shoppers as insufficient.
Costco CEO Ron Vachris told analysts that the timeline and certainty of receiving tariff refunds remain unclear and that the company plans to use such funds to lower prices and enhance customer value if refunds are obtained.
Legal Context and Supreme Court Ruling
The Supreme Court’s February 20 ruling held that President Donald Trump overstepped his statutory authority by imposing tariffs under IEEPA, a law that does not grant the president tariff-setting powers. This decision returned the issue to lower courts, where claims for tariff refunds are actively being litigated. Thousands of companies, including Costco and FedEx, have filed suits to recover tariffs paid on imported goods.
Refund Distribution and Industry Reactions
FedEx, which also faces a class action lawsuit from shippers seeking tariff refunds, stated it would return any tariff refunds to affected shippers and consumers once government and court guidance is established. The FedEx lawsuit argues that the company’s prior promises are not legally binding and seek to ensure full reimbursement for those charged higher tariffs.
According to a Federal Reserve Bank of New York study, U.S. businesses and consumers bore approximately 86% of the tariff burden as of late 2025, with the remainder falling on foreign exporters. This aligns with the Congressional Budget Office’s estimate that exporters absorbed about 5% of tariff costs, while domestic firms and consumers bore 95%.
Fox Business requested comment from Costco but had not received a response by publication time.
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