Assistance from Claude AI.
Document Type and Procedural Context
This is a complaint—the document that formally initiates a lawsuit. Filed on November 28, 2025, in the U.S. Court of International Trade, it represents Costco Wholesale Corporation’s legal challenge to tariffs imposed by President Trump through executive orders issued throughout 2025. Think of a complaint as the plaintiff’s opening move in legal chess: it lays out who the parties are, what happened, why it was wrong, and what the court should do about it.
The Court of International Trade is a specialized federal court that handles disputes involving international trade and customs duties. This court has nationwide jurisdiction and the same powers as a U.S. District Court, but focuses exclusively on trade matters.
The Parties
Plaintiff: Costco Wholesale Corporation – The retail giant that operates warehouse stores nationwide. As an importer bringing goods into the United States from numerous countries, Costco has been required to pay the challenged tariffs and has a direct financial stake in their legality.
Defendants:
- U.S. Customs and Border Protection (CBP) – The federal agency responsible for collecting tariffs and duties at the border
- Rodney S. Scott – CBP Commissioner, sued in his official capacity (meaning the lawsuit targets his position, not him personally)
- The United States of America – Named as the party that received the disputed tariff payments
Background: The Tariff Regime
To understand this case, we need to grasp what happened in early 2025. President Trump issued a cascade of executive orders imposing substantial new tariffs on imported goods, citing various national emergencies as justification:
The “Trafficking Tariff Orders” (February 2025):
- A 25% tariff on Mexican imports, justified by concerns about illegal immigration and drug trafficking
- A 25% tariff on Canadian imports, justified by opioid trafficking concerns
- An initial 10% (later increased to 20%) tariff on Chinese imports, also citing the opioid crisis
The “Reciprocal Tariff Order” (April 2025):
- A 10% baseline tariff on nearly all imports
- Additional country-specific tariffs ranging from 11% to 50% on 57 countries
- Justified by claiming trade deficits constituted a national emergency
- After Chinese retaliation, the tariff on Chinese goods eventually reached 145% (combining multiple tariff orders)
The President claimed authority for all these tariffs under the International Emergency Economic Powers Act (IEEPA), a 1977 law that grants the President emergency economic powers during national emergencies.
The Core Legal Question: Does IEEPA Authorize Tariffs?
This case hinges on statutory interpretation—specifically, whether IEEPA actually gives the President the power to impose tariffs. This matters enormously because the Constitution is quite clear about who has tariff authority.
The Constitutional Framework
Article I, Section 8 of the Constitution grants Congress—and only Congress—the power “to lay and collect Taxes, Duties, Imposts and Excises” and “to regulate Commerce with foreign Nations.” The Founders deliberately vested these powers in the legislative branch, not the executive. This wasn’t accidental: they had just fought a revolution partly over “taxation without representation” and wanted the people’s elected representatives, not a single executive, to control the purse strings.
Congress can delegate some of its powers to the President, but there are limits. Under the nondelegation doctrine, Congress must provide an “intelligible principle” to guide and constrain how the President exercises delegated authority. Think of it like giving someone power of attorney: you can authorize them to act on your behalf, but you need to give them meaningful guidance about what they can and cannot do.
What IEEPA Actually Says
IEEPA authorizes the President to take certain actions during a declared national emergency to deal with “an unusual and extraordinary threat.” Specifically, the President may:
- Investigate, regulate, or prohibit certain financial transactions involving foreign countries
- Block or regulate property in which foreign countries or nationals have an interest
- During armed hostilities, confiscate property of foreign adversaries
Notice what’s conspicuously absent: the words “tariff,” “duty,” or anything suggesting the President can impose taxes on imports. IEEPA was enacted in 1977 and has been amended several times, but never to add tariff authority. No president before Trump ever claimed IEEPA authorized tariffs.
The Argument Structure
Costco’s complaint makes a straightforward textualist argument: IEEPA’s plain language doesn’t mention tariffs, and the statute’s specific enumerated powers don’t include the general power to tax imports. The complaint emphasizes that IEEPA isn’t even in Title 19 of the U.S. Code (which contains trade laws)—it’s in Title 50 (War and National Defense), suggesting Congress viewed it as addressing fundamentally different concerns than trade policy.
The complaint also invokes the major questions doctrine, a relatively recent development in administrative law. Under this doctrine, when an agency or the President claims authority to make decisions of “vast economic and political significance,” courts require clear congressional authorization. The Supreme Court articulated this in cases like West Virginia v. EPA (2022), reasoning that Congress doesn’t hide elephants in mouseholes—if it wants to delegate massive power, it must do so explicitly.
Tariffs affecting hundreds of billions of dollars of trade clearly qualify as matters of vast economic and political significance. Yet IEEPA never clearly authorizes them.
The Precedent: V.O.S. Selections
Costco isn’t breaking new legal ground—it’s following a path already cleared by other importers. In V.O.S. Selections, Inc. v. Trump, several companies challenged the same tariffs:
- May 28, 2025: The Court of International Trade ruled the tariffs unlawful and issued a permanent injunction
- August 29, 2025: The Federal Circuit (the appeals court for trade cases), sitting en banc (meaning all judges participated), affirmed that IEEPA doesn’t authorize tariffs
- September 9, 2025: The Supreme Court granted certiorari (agreed to review the case)
- November 5, 2025: The Supreme Court heard oral arguments
- Decision pending (as of November 28, 2025)
A parallel case, Learning Resources, Inc. v. Trump, reached the same conclusion in the U.S. District Court for the District of Columbia. The Supreme Court consolidated these cases for review.
Why Costco Needs Its Own Lawsuit
Given that V.O.S. Selections already established these tariffs are unlawful—with two federal courts agreeing—why does Costco need to file separately? This gets into some technical aspects of customs law that reveal important limitations on judicial relief.
The Liquidation Problem
When goods enter the United States, the importer initially pays an estimated duty based on their customs declaration. CBP then reviews this and eventually “liquidates” the entry—meaning it fixes the final amount of duty owed. Liquidation typically happens automatically 314 days after entry, though it can be extended.
Here’s the critical point: once an entry liquidates, the importer generally has only 180 days to file a protest challenging the liquidation. After that window closes, the duties become final, even if the underlying legal basis for those duties is later declared unconstitutional or unlawful. Courts have consistently warned that importers may lack legal recourse to recover duties once entries have liquidated, even when the tariffs are subsequently struck down.
This creates a timing problem for Costco. Even though V.O.S. Selections ruled the tariffs unlawful, that judgment doesn’t automatically entitle every importer to refunds. Each importer needs its own judgment providing relief. Meanwhile, Costco’s entries subject to IEEPA tariffs began liquidating—one had already liquidated by the complaint’s filing date, and many more were scheduled to liquidate starting December 15, 2025.
Costco requested that CBP extend the liquidation deadlines, but CBP denied this request on November 18, 2025. This denial essentially forced Costco to file suit to protect its rights.
The Scope of Judicial Relief
Even when the Supreme Court rules in V.O.S. Selections, that decision will establish a legal principle but won’t automatically provide monetary relief to parties not in that case. Courts generally provide relief only to parties before them. If Costco waited for V.O.S. Selections and then sought refunds administratively, CBP might argue that liquidation had occurred and Costco missed its protest deadline, foreclosing relief.
By filing now and seeking a preliminary injunction to suspend liquidation, Costco preserves its ability to obtain complete relief regardless of how long the Supreme Court takes to decide V.O.S. Selections.
Evaluation of Arguments
Strength of Costco’s Position
Costco’s arguments are legally strong for several reasons:
Textual Support: IEEPA’s plain language simply doesn’t mention tariffs. In statutory interpretation, courts start with text. When a statute lists specific powers (investigate, regulate, prohibit certain transactions; block property), courts are reluctant to read in additional, broader powers not mentioned. This is called expressio unius est exclusio alterius—the expression of one thing excludes others.
Precedent: Two federal courts have already agreed with this interpretation. While these aren’t binding on this court in the technical sense (the Court of International Trade ruling was in a different case, and the Federal Circuit ruling is currently on appeal), they carry significant persuasive weight. Courts generally prefer consistency and avoid reaching different conclusions on identical legal questions.
Constitutional Avoidance: The complaint notes that if IEEPA were read to authorize tariffs, it would likely be unconstitutional under the nondelegation doctrine. Courts follow a principle of constitutional avoidance: when a statute can be interpreted in two ways—one raising serious constitutional questions and one avoiding them—courts choose the interpretation that avoids constitutional problems. Reading IEEPA not to authorize tariffs avoids having to strike down the statute as an unconstitutional delegation.
Major Questions Doctrine: The Supreme Court has increasingly applied this doctrine to limit agency and executive power. Given that the Court has shown interest in this approach (as evidenced in recent cases like West Virginia v. EPA and Biden v. Nebraska), it seems likely to find the major questions doctrine applicable to tariff authority worth hundreds of billions of dollars.
Historical Practice: The complaint emphasizes that no president in IEEPA’s 48-year history ever claimed it authorized tariffs until 2025. Long-standing executive branch interpretation (or non-interpretation) of a statute carries weight. If IEEPA authorized tariffs, why didn’t previous presidents facing emergencies—including the 2008 financial crisis, 9/11, or the COVID pandemic—use this authority?
Potential Weaknesses
The government faces significant challenges in defending these tariffs:
Textual Silence: The government must argue that IEEPA’s general grants of power to “regulate” or “prohibit” transactions somehow include the power to impose tariffs. But courts are skeptical of arguments that require reading significant powers into vague general language, especially when the statute elsewhere uses specific, detailed language.
Breadth of National Emergency Declaration: The government declared trade deficits themselves to be national emergencies. This seems to stretch the concept of “unusual and extraordinary threat” to its breaking point. If routine economic conditions can be declared emergencies justifying unilateral presidential action, the limits on executive power become essentially meaningless.
Intelligible Principle Problem: The complaint cleverly notes that the chaotic, rapidly changing tariff regime—with tariffs imposed, suspended, modified, reimposed at different rates—demonstrates the lack of any constraining principle. The government would need to articulate what principle limits the President’s discretion under IEEPA. “Whatever the President thinks necessary during a declared emergency” isn’t an intelligible principle—it’s essentially unlimited discretion.
Alternative Statutory Schemes: Congress has enacted detailed statutes specifically governing when and how the President can impose tariffs (like Section 232 for national security or Section 301 for unfair trade practices). These statutes include procedural requirements, substantive standards, and limitations. The government’s reading of IEEPA would essentially allow the President to bypass all these carefully crafted statutory schemes by simply declaring an emergency.
Arguments by the Government (Anticipated)
Though this is Costco’s complaint and doesn’t include the government’s full response, we can anticipate the government’s likely arguments based on the issues raised:
Broad Reading of “Regulate”: The government will argue that “regulate” in IEEPA should be read broadly to include any form of economic regulation, including tariffs. Tariffs, after all, regulate the flow of goods into the country.
Evaluation: This argument faces the problem that “regulate” appears alongside “prohibit,” suggesting a continuum from less restrictive (regulation) to more restrictive (prohibition). Tariffs aren’t prohibitions (they allow trade to continue while taxing it), but they’re also not traditionally what “regulate” means in this context. IEEPA’s other provisions specify what can be regulated (transactions, property transfers), suggesting “regulate” has a more specific meaning than “do anything that affects trade.”
Property Blocking Authority: The government might argue that imposing tariffs is analogous to blocking property interests, since tariffs affect the value of imported goods.
Evaluation: This is a stretch. Blocking property means freezing it or prohibiting its transfer. Tariffs allow goods to enter commerce; they just impose a tax. Moreover, the property-blocking provision specifically addresses property “in which any foreign country or a national thereof has any interest”—but imported goods typically belong to U.S. importers by the time they reach the border.
Emergency Powers Deference: The government will argue that courts should defer to presidential judgment about what’s necessary during emergencies, especially in foreign affairs.
Evaluation: While courts do give the President deference in foreign affairs, they don’t defer when the question is whether Congress gave the President authority in the first place. That’s a question of statutory interpretation and separation of powers, not foreign policy judgment. As the Supreme Court said in Youngstown Sheet & Tube Co. v. Sawyer (1952), even during emergencies, the President must point to constitutional or statutory authority.
Next Steps and Timeline
For Costco:
- File a motion for preliminary injunction to suspend liquidation of entries subject to IEEPA tariffs—the complaint indicates this is coming
- Wait for the government’s response to the complaint
- Engage in discovery (exchanging documents and information)
- Potentially move for summary judgment if the Supreme Court rules in V.O.S. Selections before trial
For the Government:
- File a motion to dismiss, arguing the court should await the Supreme Court’s decision in V.O.S. Selections
- Alternatively, argue that Costco’s claims are premature or that the protest process must be exhausted first
- If the case proceeds, defend the legality of the tariffs
The Supreme Court Factor: Everyone is waiting for the Supreme Court’s decision in V.O.S. Selections. If the Court rules the tariffs unlawful, this case becomes straightforward—Costco would simply apply that precedent. If the Court surprisingly upholds the tariffs, Costco’s case becomes much more difficult.
However, Costco couldn’t simply wait for V.O.S. Selections because of the liquidation deadlines. By filing now, Costco ensures it has its own case with its own injunction protecting its interests.
Prediction: Who Will Prevail?
Based on the legal arguments and existing precedents, Costco is likely to prevail, for several reasons:
Existing Judicial Consensus: Two federal courts have already ruled these tariffs unlawful. While the Supreme Court could reverse, courts generally respect precedent, and the lower court reasoning appears sound.
Clear Statutory Text: IEEPA’s failure to mention tariffs is fatal to the government’s position under standard textualist interpretation, which the current Supreme Court favors.
Constitutional Concerns: The Supreme Court has shown increasing interest in limiting executive and administrative power through doctrines like major questions and nondelegation. The tariffs present a nearly perfect test case for these doctrines.
Practical Absurdity: The government’s position would mean the President can impose unlimited tariffs anytime by declaring an emergency, essentially reading Congress’s careful trade statutes out of existence. Courts avoid interpretations that render other statutes superfluous.
Limited Government Arguments: The government faces a difficult task distinguishing these tariffs from ordinary trade regulation that everyone agrees requires congressional authorization under specific trade statutes.
That said, Supreme Court decisions can be surprising, and the Court might find a narrow way to uphold some aspects of the tariffs (perhaps the trafficking-related tariffs while striking down the reciprocal tariffs) or remand for further factual development about whether genuine emergencies existed.
Broader Implications
This case raises profound questions about separation of powers and democratic governance:
Economic Policy Authority: If the President can unilaterally impose economy-wide tariffs by declaring emergencies, what limits remain on presidential economic power? Could the President declare inflation an emergency and impose price controls? Declare unemployment an emergency and mandate hiring?
Legislative Supremacy: The Constitution vests tariff authority in Congress because the Founders considered it fundamental to republican government that taxation require legislative approval. Allowing unilateral presidential tariffs undermines this core constitutional principle.
Emergency Powers Scope: How broadly can presidents define “emergencies”? If trade deficits qualify, what doesn’t? This case could establish important boundaries on emergency power invocations.
International Trade Relations: The U.S. has treaty obligations and participates in the World Trade Organization system. Unilateral presidential tariffs based on declared emergencies strain these commitments and could trigger retaliation, affecting American exporters and workers.
Predictability in Commercial Law: Businesses need legal certainty to make investment and planning decisions. The whipsaw effect of tariffs imposed, modified, suspended, and reimposed creates economic chaos. This case addresses whether presidential tariff authority should be constrained to promote commercial predictability.
Constitutional Structure: At a deeper level, this case is about whether our constitutional system of separated powers and checks and balances will constrain executive action, or whether emergency declarations become a general-purpose tool for circumventing congressional authority.
Conclusion
Costco’s complaint is a straightforward application of existing precedent to protect its financial interests before liquidation deadlines foreclose relief. The legal arguments strongly favor Costco—IEEPA doesn’t authorize tariffs, two federal courts agree, and fundamental constitutional principles support limiting presidential power to tax. The case’s real significance lies not in predicting its outcome (Costco should win) but in understanding what’s at stake: whether Congress or the President controls tariff policy, and whether emergency powers have meaningful limits or become a blank check for unilateral executive action.
For citizens concerned about constitutional governance, this case demonstrates how courts serve as essential checks on executive power, even when the President claims national security or emergency justifications. It shows that in our system, even the President must point to genuine legal authority—not just policy goals or claimed necessity—to act. And it illustrates how the technical details of customs law and administrative procedure can determine whether constitutional principles are effectively enforced or rendered hollow.