Costco Sues Trump Government For Tariff Refunds Before Supreme Court Ruling On Their Legality
Dozens of companies have filed lawsuits in the US Court of International Trade since late October, where they have challenged Donald Trump's use of powers meant for an economic emergency to impose tariffs, and now the biggest warehouse club chain in the country has decided to follow suit.
Costco is one of the biggest companies to jump into the ring in this case which is being driven by smaller businesses and state officials with Democratic leanings.
Also Read | US apex court sceptical of tariffs? Here's what Trump can do to continue dutiesThe arguments on Trump tariffs were heard by the US Supreme Court on November 5. The case was put on a fast-track schedule by the judges presiding over the same, who, however, have not clarified when the intend on passing the judgement in the case. Businesses, meanwhile, have been suing the Trump government to avoid the uncertainty regarding their refund eligibility in case the court ruling goes against the US President.
What did Coscto's lawyers say?As per Costco lawyers, the complaint, filed on 28 November was a result of the uncertainty regarding the guarantee of refunds for all companies that have been paying additional duties if SCOTUS declares Trump tariffs to be illegal.
The lawsuit, however, has not specified how much the company had to pay because of the additional tariffs imposed by the Trump administration.
Also Read | Layoffs sparked by Trump tariffs-Canadian steel maker Algoma to cut 40% staffThe company said that intervention from the court is required at the earliest since it's request for extension of the schedule for finalising tariffs were denied by the US Customs and Border Protection. This could jeopardise the company's chances of seeking full refunds in future, as per Bloomberg.
What has the White House said regarding the tariffs?Kush Desai, the White House spokesperson, said in a statement,“The economic consequences of the failure to uphold President Trump's lawful tariffs are enormous and this suit highlights that fact. The White House looks forward to the Supreme Court's speedy and proper resolution of this matter.”
Judges skeptical on Trump tariffsDespite Trump tariffs generating tens of billions of dollars a month, judges are skeptical of their legality. Lower federal courts have already ruled against the Trump tariffs but have allowed the government to continue enforcing the same until the Supreme Court judgement arrives.
Some major companies besides Costco that have filed lawsuits against the US government include Revlon Consumer Products Corp and Kawasaki Motors Manufacturing Corp.
Also Read | US, UK seal zero tariff pharmaceutical deal – Key points to knowWith the tariffs going through a number of changes in rates after Trump's negotiations with several countries, their overall impact has been more muted than what was earlier expected.
What Costco is doing to mitigate tariff impactsCostco has said that tariffs are primarily impacting its non-food items, and that it has rerouted some products to markets outside the US, ordered higher quantities of inventory to make their position secure ahead of the new levies and also purchased goods from a lower number of suppliers with consolidated buying. It has also been changing merchandise altogether whenever items got too expensive.
The company's Chief Financial Officer, Gary Millerchip, had earlier told Bloomberg News,“We're doing everything we can,” adding,“Whether that's working with the suppliers to find efficiencies to offset the impact of tariffs, or whether it's sourcing with them often to different countries.”
Costco has said that it has kept the prices of bananas and pineapples, which are imported form countries in Central and South America, stead considering their importance to customers. On the other hand, prices of flowers, which are less essential, have been increased.
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