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Costco sues Trump administration, seeking tariff refund · THE DAILY BRIEF

• 0:00
  Speaker 1: So to dive more into this lawsuit, I'm enjoy now
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  Speaker 1: by Tim Meyer. He is a trade lawyer and professor
• 0:06
  Speaker 1: of International Business Law, Duke University. It's good to have
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  Speaker 1: you on the show.
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  Speaker 2: Thank you, Oh, happy to be here.
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  Speaker 1: So Costco is seeking a full refund of all duties
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  Speaker 1: as a result of Donald Trump's reciprocal tariffs. How strong
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  Speaker 1: do you think their case is?
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  Speaker 2: Well, you know, as you mentioned, their case is really
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  Speaker 2: going to turn on this a separate case that's already
• 0:27
  Speaker 2: in front of the Supreme Court, a case called Learning
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  Speaker 2: Resources be Trump. The Supreme Court heard argument in that
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  Speaker 2: case about a month ago, and the argument I think
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  Speaker 2: most people think went pretty well for the challengers to
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  Speaker 2: the to the tariffs the plaintiffs. And so if the
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  Speaker 2: challengers win that suit, and we would expect a decision
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  Speaker 2: from the Supreme Court probably sometime early in the new year,
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  Speaker 2: if the challengers win in that, in that case, Costco
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  Speaker 2: is going to have a very strong case. Basically, what
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  Speaker 2: they're going to do is they're just going to point
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  Speaker 2: to the Supreme Court's decision in that in that earlier
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  Speaker 2: case and sort of say, look, the Supreme Court has
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  Speaker 2: already said these tariffs are unlawful. You should therefore also
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  Speaker 2: say they are unlawful and and we're entitled to a refund,
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  Speaker 2: And then the case will really be much more about,
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  Speaker 2: you know, how much did Costco pay and are they
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  Speaker 2: entitled to a refund? Do they have the appropriate records?
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  Speaker 2: And have they done the appropriate administrative steps necessary to
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  Speaker 2: claim a refund?
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  Speaker 1: Now, if it doesn't, if that previous case does not
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  Speaker 1: go the way you're suggesting, does Costco then still have
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  Speaker 1: an opportunity or any case to be made, you think.
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  Speaker 2: So, you know, if the government wins the Supreme Court case,
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  Speaker 2: learning Resources, Costco is going to think have more trouble.
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  Speaker 2: It's I think that the legality of the tariffs is
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  Speaker 2: likely to basically be decided one way or the other
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  Speaker 2: by that Supreme Court case. It's possible that the Supreme
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  Speaker 2: Court would rule for the government in that case but
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  Speaker 2: still leave open individual challenges by companies like Costco. But
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  Speaker 2: more than likely, whatever the Supreme Court does and Learning
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  Speaker 2: Resources is going to determine the legality of the teriffs.
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  Speaker 1: Okay, And so if that case is determined, if the
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  Speaker 1: tariffs are determined to be I guess illegal, do you
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  Speaker 1: think other major companies are going to follow suit, follow
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  Speaker 1: what Costco is doing here and seek damages.
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  Speaker 2: So that's exactly what's going to happen. So Costco is
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  Speaker 2: essentially getting a line at the Court of International Trade
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  Speaker 2: where they filed this lawsuit, to have their court basically
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  Speaker 2: adjudicate their entitlement to a refund. A number of other
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  Speaker 2: smaller companies, Costco is I think the largest so far
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  Speaker 2: to file suit. But what we're likely to see is
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  Speaker 2: really a wave of lawsuits seeking billions of dollars in
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  Speaker 2: terms of refunds. There is an administrative process through which
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  Speaker 2: companies can seek from the government directly a refund if
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  Speaker 2: the Supreme Court were to uphold the lower court decisions
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  Speaker 2: striking down the tariffs. But I think companies are increasingly
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  Speaker 2: uncertain that that process, that administrative process is going to
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  Speaker 2: play out in a timely fashion. There are certain deadlines
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  Speaker 2: associated with that process. There's the first deadline is a
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  Speaker 2: three hundred and fourteen day period from the date in
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  Speaker 2: import enters the United States, and so I think companies
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  Speaker 2: are really going to increasingly be filing lawsuits as we
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  Speaker 2: get into the new year to preserve their entitlement to
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  Speaker 2: a refund. As those deadlines start to pass for the
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  Speaker 2: earliest tariffs that were paid under the President's IPO orders
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  Speaker 2: that were issued early in twenty twenty five.
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  Speaker 1: I'm just thinking about all of these businesses that have
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  Speaker 1: been paying these tariffs and now, as you point out,
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  Speaker 1: doing the proper paperwork to make sure they're at the ready.
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  Speaker 1: I guess in the event of this decision in the
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  Speaker 1: early new year determining whether or not the tariffs are
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  Speaker 1: actually legal or not. I mean, what do you make
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  Speaker 1: of the argument that Donald Trump has made cite international
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  Speaker 1: emergency Economic powers when he went and imposed as the
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  Speaker 1: global tariffs.
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  Speaker 2: Yeah, so that's the issue. COSTCO has presented that issue
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  Speaker 2: in the case, although again that's really the issue in
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  Speaker 2: learning resources and learning resources. Will the Supreme Court in
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  Speaker 2: the Learning resources case is going to decide that question? Honestly,
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  Speaker 2: you know, the President's argument is really sort of unprecedented.
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  Speaker 2: The International Emergency Economic Powers Act, which we call AIPA,
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  Speaker 2: does not use the word tariff. It does not speak
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  Speaker 2: of tax tariffs or just taxes. It doesn't say anything
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  Speaker 2: about taxes or duties. And so it's really unlikely that Congress,
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  Speaker 2: our US Congress intended to delegate the power to impose
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  Speaker 2: tariffs when they passed AIPA in nineteen seventy seven. No
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  Speaker 2: president nineteen seventy seven has ever claimed the authority to
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  Speaker 2: impose tariffs under the International Emergency Economic Powers Act, and
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  Speaker 2: presidents regularly use that law for lots of different kinds
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  Speaker 2: of things, particularly things like economic sanctions against countries like Russia,
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  Speaker 2: for instance. So the fact that no reference is made
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  Speaker 2: in the law to tariffs and the fact that no
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  Speaker 2: president has ever claimed this authority just makes it really unlikely.
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  Speaker 2: I think that Congress intended to give the president the
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  Speaker 2: power under this law to do what President Trump has
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  Speaker 2: done here.
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  Speaker 1: Tim Meyer, trade lawyer and professor of International business law
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  Speaker 1: at Duke University, thank you so much for that.
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  Speaker 2: Yep, thank you