Costco Sues Over Trump Tariffs: What Could That Mean for Prices in 2026?

(Image credit: Getty Images)

Costco is typically known for deals like its $1.50 hot dog combo, and lately, gold bars that keep selling out. But at this moment, the warehouse retailer is in the spotlight due to a high-stakes legal battle over sweeping tariffs imposed by President Donald Trump.

What's happening? Costco recently filed a lawsuit to preserve its right to a potential refund of an undisclosed amount of tariffs paid. A sticking point is whether the United States Supreme Court will ultimately rule that Trump lacked the authority to impose the levies in the first place.

But it’s important to note that Costco’s lawsuit is separate from the main Supreme Court tariff case. The company argues that even if the U.S. Supreme Court strikes down Trump’s tariffs, importers like Costco might not automatically get refunds of the money they paid unless they file their own lawsuits.

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just ~~$107.88~~ $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

https://cdn.mos.cms.futurecdn.net/flexiimages/y99mlvgqmn1763972420.png

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

And Costco isn’t the only retailer taking action. Other companies have reportedly filed lawsuits related to U.S. tariff policy. Some contest Trump tariffs on Chinese-made goods while others seek to preserve eligibility for potential tariff reimbursements.

So, will tariff refunds even happen? And what does all of this mean for you as a shopper? Read on.

Costco tariff refunds?

Costco filed suit in the U.S. Court of International Trade to preserve its ability to recover tariffs paid under the Trump administration's trade policies.

Earlier in 2025, President Trump used emergency powers under the International Emergency Economic Powers Act (IEEPA) to impose sweeping new tariffs on goods from key trading partners.
He said the tariffs, which have been as high as 50-145% in some instances, were needed to address problems like drug trafficking and trade deficits.
Those levies have generated billions of dollars primarily at the expense of importers and U.S. consumers.

Many companies have sued the government, arguing that the IEEPA doesn’t grant the president authority to impose tariffs and that, because tariffs are taxes, that authority instead lies with Congress.

The Court of International Trade and a federal appeals court agreed, ruling that Trump had overstepped his authority. However, the Trump administration appealed, and the Supreme Court is now considering whether most of Trump’s tariffs are illegal.

Adding to the chatter: Some believe that tariff refunds may be warranted if the Supreme Court rules that Trump lacked authority to impose tariffs under the IEEPA.

In its filing, Costco warns that if U.S. Customs and Border Protection (CBP) finalizes tariff payments before a key deadline, the ability to recover some of the tariff funds could be lost or made more difficult for some importers.

So, Costco’s legal challenge focuses on these key points:

Many of Trump’s tariffs may be unlawful because IEEPA doesn’t explicitly empower the president to impose them.
Even if SCOUS strikes down the tariffs, importers have to act swiftly through legal action to secure refund eligibility before CBP “liquidation.”

According to the lawsuit, Costco argues: "This separate action is necessary…because even if the IEEPA duties and underlying executive orders are held unlawful by the Supreme Court, importers that have paid IEEPA duties, including Plaintiff, are not guaranteed a refund for those unlawfully collected tariffs in the absence of their own judgment and judicial relief.”

Supreme Court tariff ruling?

As Kiplinger has reported, lower courts have already found Trump’s tariffs imposed under the IEEPA to be unlawful in cases, including those before SCOTUS, brought by beverage company V.O.S. Selections and toymaker Learning Resources, Inc. But the Trump administration appealed those rulings, so the Supreme Court’s upcoming decision looms large.

During oral arguments on November 5, several justices seemed skeptical about the president's “emergency” tariff powers. Justice Amy Coney Barrett pondered how tariff refunds might work, describing such a process as a potential “mess.”

At that time, in an emailed statement, Pacific Legal Foundation senior attorney Oliver Dunford noted, "This is a complicated case involving profound constitutional questions. It's hard to predict exactly how the court will rule, but the President's IEEPA tariffs seem to be in trouble."

Meanwhile, Trump has continually framed tariffs as essential for protecting U.S. jobs, industries, and long-term economic strength. He claims reversing them would "our country would be completely destroyed."

Consumer impact

Some legal experts note that even if SCOTUS strikes down the tariffs, the government could attempt to reimpose similar duties under other statutory authorities. And in the event of a Supreme Court ruling against the Trump administration, refunding the duties wouldn’t necessarily be automatic. (Under current law, importers generally must file a timely protest to challenge liquidation determinations.)

Regardless of the lawsuit's outcome, any changes in tariff policies could impact the pricing and availability of products for millions of shoppers.

For example, if existing tariffs remain in place, consumers will likely continue to face higher prices on various goods. On the other hand, if the Supreme Court invalidates the tariffs and/or allows tariff refunds, businesses could see financial relief (reap substantial sums) that might eventually lead to lower prices for shoppers. Stay tuned.

Costco hot dogs: 40th anniversary

Some less dicey news? Amid this legal challenge over import costs, Costco's popular signature offerings continue.

The $1.50 hot dog-and-soda combo turned 40 this year, marking its 1985 introduction. Sales reportedly hit a record 245 million units in fiscal year 2025, up from 199 million the prior year.

Meanwhile, gold bar sales, launched online to Costco members in June 2023, also sustained strong demand through 2025 as prices topped $4,000 per ounce.

Initial batches sold out in hours, generating an estimated $100-200 million monthly by 2024, while e-commerce sales reportedly rose 15.6% in FY2025.
September listings reportedly depleted quickly.

Costco imposed a limit of one transaction per membership per 24-hour period, with a max of two 1-ounce, 24-karat gold bars.

TOPICS

Kelley R. Taylor is the senior tax editor at Kiplinger.com, where she breaks down federal and state tax rules and news to help readers navigate their finances with confidence. A corporate attorney and business journalist with more than 20 years of experience, Kelley has covered issues ranging from partnerships, carried interest, compensation and benefits, and tax‑exempt organizations to RMDs, capital gains taxes, and income tax brackets. Her award‑winning work has been featured in numerous national and specialty publications.