Costco has received $184 million in tariff refunds from the US government and expects additional payments as importers continue to recover duties collected under tariffs that were later struck down.
The retailer said it plans to use the refunded money to reduce the prices of everyday goods and non-food items, according to The Seattle Times.
Costco disclosed the refunds as it reported strong financial results for its fourth quarter, recording nearly $96 billion in revenue, an 11 per cent increase from the same period a year earlier. Its net income also climbed by 15 per cent.
The refunds follow a court battle over tariffs imposed by President Donald Trump under the 1977 International Emergency Economic Powers Act.
In February, US Court of International Trade Judge Richard Eaton ruled that companies that had paid the tariffs invalidated by the Supreme Court were entitled to receive refunds.
Eaton wrote that “all importers of record” were “entitled to benefit” from the Supreme Court’s decision overturning the broad tariffs.
The Supreme Court had ruled that the tariffs imposed under the emergency powers law were unconstitutional. The decision covered Trump’s sweeping “reciprocal” tariffs on imports from nearly every country.
The justices held that the president could not independently impose and modify tariffs under the law because the authority to levy taxes belongs to Congress.
The federal government had collected more than $130 billion through the now-invalidated tariffs by mid-December. The Penn Wharton Budget Model estimates that the government could eventually be required to return as much as $175 billion.
Eaton’s ruling stemmed from a lawsuit filed by Atmus Filtration, a Nashville, Tennessee-based manufacturer of filtration products that sought a refund for tariffs it had paid.
The ruling also addressed how US Customs and Border Protection handles tariff payments.
Imported goods entering the United States go through a process known as “liquidation”, during which Customs makes a final determination of the duties owed. Importers have 180 days after liquidation to formally challenge the charges, after which the assessment becomes legally final.
Eaton ordered customs officials to stop collecting the invalidated IEEPA tariffs on goods that were still going through the liquidation process.
For shipments that had already gone through liquidation, the agency was directed to recalculate the duties without applying the struck-down tariffs.
Barry Appleton, a law professor and co-director of New York Law School’s Center for International Law, described the ruling as beneficial to businesses and consumers who had paid the duties.
“This is a great decision for importers and consumers who paid,” Appleton said.
“It will make customs brokers busy. It should make things easier for the courts — and get a process underway for those importers who paid within the last 180 days.”
