I’ve previously written about the very different approaches to doing business by the big-box retailers, Costco and Sam’s Club. I shop at Costco rather than at Walmart’s Sam’s Club because Costco pays its workers well, provides health care coverage to its employees, and shows in a variety of ways that it values its members. I still recall a conversation at the Costco check-out when I said something to my husband to that effect, and the cashier weighed in with an emphatic agreement, saying she’d previously worked at a Sam’s Club and that there was no comparison–she was compensated, and treated, so much better at Costco.
My choice of retailers was confirmed, in my view, when Costco responded to Trump’s anti-DEI push by telling the administration, in effect, to pound sand–that they’d continue their DEI efforts.
And now, Costco has filed suit against the Trump administration, demanding repayment of the added amounts the retailer has paid due to Trump’s ridiculous tariffs. As The New Republic has reported, the company has filed a lawsuit arguing that the tariffs were illegal; that the law under which Trump justified the tariffs was never meant to authorize their collection, and that “the pell-mell manner by which these on-again/off-again IEEPA duties have been threatened, modified, suspended, and re-imposed” was evidence of the validity of that assertion.
As the article notes, while other companies have filed similar suits, Costco’s stands out “not only because of the size of the company involved but because it illustrates how tariffs actually work—and exposes the Trump administration’s lies about them.”
The administration has responded to these suits by insisting that it would refund American importers if the tariffs were found illegal. (This was the concession that persuaded the Federal Circuit Court of Appeals to deny issuance of a preliminary injunction, allowing the government to keep collecting them during litigation.) Costco alleges that the way the tariffs are collected (among other peculiarities of this situation explained at length in the linked article) makes that promise of refunds ephemeral absent a specific company’s lawsuit. Even if the tariffs are found to be unlawful, observers have opined that the administration is likely to stall the tariff rebate, according to academics following the debate. One expert has predicted that the repayment process will be “a political quagmire” and suggested that it’s likely Costco filed suit to protect itself.
Even some of the Supreme Court justices who have taken up residence in Trump’s pocket have signaled an unwillingness to find the tariffs lawful. Roberts has (correctly) called them a tax, and noted that taxation is a core power of Congress, not the executive branch. If Costco and the other companies that have sued win their cases, what the article calls “Trump’s scam” will collapse—and his administration may be forced to make those companies whole.
The Washington Post is also covering the litigation.
The warehouse club last week became the largest company — and the first major retailer — to sue the Trump administration, seeking a full refund for the levies it has paid this year. The Supreme Court heard arguments in November on whether President Donald Trump has legal authority to impose tariffs on goods from nearly all countries, and it is expected to rule in the coming weeks or months. If it rejects the administration’s case that tariffs are justified as an emergency, the companies could be entitled to hefty refunds.
The article also pointed out that Costco “is uniquely positioned to weather any backlash from Washington” thanks to its legions of devoted customer/members– a devotion that sets it apart from most other retailers, who are accordingly more reluctant to make waves by resisting the administration.
There’s a lesson to be learned here. Costco’s approach to the conduct of its business initially earned it the devotion of those legions of members, and now, its principled stances have generated increased support from that membership.
While the grassroots efforts to boycott Target for ending its DEI programs led to weakening foot traffic and diminished financial outlooks for consecutive quarters, Costco saw a boost. Net sales for the 2025 fiscal year (which ended Aug. 31) increased 8 percent over 2024 to $269.9 billion. Net sales for November were also up 8.1 percent over last year, reaching $23.6 billion, the company reported last week.
It’s another reminder that We the People can punish cowardice and reward principled behavior.
