Class Action Lawsuit Targets Costco
Costco is confronting a proposed nationwide class action lawsuit filed by a shopper in federal court in Illinois, which demands refunds for customers over higher prices attributed to Trump administration tariffs later deemed unconstitutional by the Supreme Court. The suit seeks a declaration that Costco must distribute any refunds it receives for tariffs paid under the International Emergency Economic Powers Act (IEEPA) directly to affected customers.
Supreme Court Ruling and Tariff Recovery Efforts
This action follows the Supreme Court's February 20 decision holding that President Donald Trump overstepped his authority by imposing tariffs under IEEPA, as the law does not grant tariff powers to the president. Costco joins more than 2,000 companies that have sued in the U.S. Court of International Trade to reclaim tariffs paid on imported goods. Should Costco secure these refunds, the lawsuit insists they be passed to consumers who encountered elevated prices due to the tariffs.
Costco's Position and CEO Comments
The lawsuit argues against Costco achieving double recovery, noting the company's lack of commitment to return any tariff refunds to consumers who absorbed the costs. Costco has only hinted at possible future benefits for an indeterminate group of shoppers. CEO Ron Vachris recently informed analysts that refunds remain uncertain in timing and occurrence, but if received, the funds would support lower prices and enhanced value for shoppers.
If refunds are issued to FedEx, we will issue refunds to the shippers and consumers who originally bore those charges. When that will happen and the exact process for requesting and issuing refunds will depend in part on future guidance from the government and the court.
Parallel Case Against FedEx
FedEx, also pursuing tariff refunds through the Court of International Trade, faces a comparable class action filed in late February by shippers who paid higher rates due to the tariffs. Despite FedEx's statement committing to refunds, the suit contends this promise lacks legal enforceability and demands assurance that shippers and consumers receive the overpaid amounts.
Tariff Burden on U.S. Economy
The Supreme Court ruling remands the matter to lower courts, potentially leading to government agreements on refund formats. A Federal Reserve Bank of New York study indicates U.S. businesses and consumers shouldered 86% of tariff costs by November 2025, down slightly from 94% earlier in the year. Similar findings from the Congressional Budget Office place the U.S. share at 95%, with foreign exporters absorbing the rest.
