Costco vs. Trump: The First Cracks in a $205 Billion Tariff Empire

An American retail giant just stepped into the ring. The rest of corporate America may follow.

On December 1, 2025, Costco Wholesale filed a lawsuit that could blow a hole straight through Donald Trump’s signature trade agenda. The company asked the U.S. Court of International Trade to declare that the White House never had lawful authority to impose the tariffs that have drained nearly $90 billion from importers and more than $205 billion from the broader economy. The filing is not a symbolic swipe. It is a direct legal punch to the throat of a policy Trump once bragged would “bring China to its knees.”

Costco’s challenge targets the very foundation of the program. The tariffs were imposed under the International Emergency Economic Powers Act, known as IEEPA, a law meant for national security emergencies, not economic crusades. Costco’s lawyers argue the statute does not authorize presidents to unilaterally rewrite the nation’s tariff code. In plain English, they are saying Trump invented presidential tariff powers that do not exist in law. If the courts agree, the entire multi-year scheme collapses.

The move signals a growing revolt inside American industry. While public political commentary often focuses on culture wars, the business sector has been calculating the cost of Trump’s experiment. Costco’s lawsuit shows they are done eating those losses quietly.

According to the filing, a third of Costco’s U.S. inventory is imported, which exposes the company to tariff costs on everything from appliances to electronics to essential foods. Some fresh imports, including pineapples and bananas, were hit directly by Trump’s orders. Despite that, Costco told investors it refused to raise prices because those foods are core necessities for American families. In other words, the company absorbed the financial hit so customers would not. Meanwhile, the Trump administration collected tariffs at historic levels.

The uploaded NBC News document provides the clearest picture. By late 2025, the federal government had raked in $205 billion under the tariff scheme. Importers paid nearly $90 billion of that amount. Costco never disclosed its exact losses, but its global chief financial officer detailed the operational strain. The company shifted supply chains, relocated production, consolidated buying across international markets, and still could not escape the financial weight. (NBC News, 2025)

What makes this lawsuit explosive is timing. Only weeks ago, the Supreme Court signaled skepticism toward the administration’s argument that IEEPA gives presidents unlimited tariff authority. Conservative and liberal justices both pressed Solicitor General John Sauer with the same question: Where exactly does the law give a president the power to engineer a full-scale import tax regime? The government had no clear answer.

If Costco wins, the ruling will set a precedent for every importer crushed by Trump’s trade war. Revlon, EssilorLuxottica, Kawasaki, Bumble Bee, Yokohama Tire, and dozens of others have already filed similar suits. Costco is simply the largest and most recognizable brand to step out front. The dam is breaking.

What the public rarely sees is the domino effect these tariffs created. Higher import taxes raised costs for manufacturers, which put pressure on the supply chain, forcing retailers to either raise prices or shrink margins. Companies like Costco ate those losses. Small businesses could not. Consumers paid more for basics. Inflation spread through the system. And Trump continued to claim the policy was “making America rich.”

Now the courts will decide.

This lawsuit is not about one company’s frustration. It is about the legal legitimacy of the entire Trump tariff empire. Costco’s move signals that American corporations no longer believe this policy is just bad economics. They believe it is unlawful. They are betting the judiciary will agree.

The final irony is that Trump sold the tariffs as a path to American prosperity. Instead, they triggered a corporate uprising. And one of the most trusted retailers in the country just fired the first real shot.

The question now is simple. How many companies will join before the whole system collapses?

References

NBC News. (2025). Costco sues the Trump administration, seeking a refund of tariffs. Retrieved from

U.S. Customs and Border Protection. (2025). Tariff revenue data, September 2025.

U.S. Supreme Court. (2025). Oral arguments: Trump tariff authority under IEEPA.

Costco Wholesale Corporation. (2025). Q2 and Q3 2025 earnings calls and investor disclosures.

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