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On November 28, 2025, Costco filed a lawsuit against the United States seeking refunds for tariffs imposed under the International Emergency Economic Powers Act (IEEPA). Several federal courts—including the Court of International Trade (CIT), the District Court for the District of Columbia (D.D.C.), and the United States Court of Appeals for the Federal Circuit (Federal Circuit) —have already ruled the IEEPA tariffs unlawful. The Supreme Court, now reviewing the issue in the consolidated V.O.S. Selections case, heard arguments in November and is expected to issue its decision in the coming months.
The Costco lawsuit serves as a wake-up call for global manufacturers, especially Korean multinationals whose U.S. subsidiaries paid significant duties on Korean-origin imports. Costco's proactive litigation strategy aimed to secure a court ruling specific to its own imports, operating under the theory that importers are not automatically guaranteed refunds for IEEPA tariffs without obtaining their own judgments and judicial relief.
What Costco Did—And Why It Matters
In its complaint, Costco argued that:
- The Trump administration pursuant to IEEPA imposed "reciprocal tariffs", among others.
- The lower courts have already held that IEEPA does not authorize tariffs, making these duties unlawful.
- Despite these rulings, the Supreme Court may not automatically require the U.S. government to refund duties. If it does not, each importer may have to file its own lawsuit to obtain relief.
Critically, the core of Costco's lawsuit and its motion for an injunction focuses on the risks associated with the "liquidation" of import entries.
Liquidation is the process by which the U.S. Customs and Border Protection (CBP) makes the final calculation of duties owed on imported goods. After liquidation, the duty amount is fixed, and CBP notifies the importer whether additional payment is due or if a refund will be issued. Importers initially pay estimated duties, and CBP determines the final amount during liquidation, which usually takes place 314 days after entry, unless an extension is granted.
Most importantly, after liquidation, importers have only 180 days to protest and request CBP to "reliquidate" the entry if they believe the assessed duties are incorrect. However, not all liquidations can be protested. If CBP has acted in a "ministerial capacity" in liquidating entries, those entries cannot be challenged through a protest. Under 28 U.S.C. § 1581(a), importers can seek judicial review only if CBP denies a protest.
Costco argued that, under these circumstances, importers may lack the legal right to recover refunds on entries that have already been liquidated, even if the underlying tariffs are later found to be unlawful. Liquidation before the Supreme Court ruling would cause "irreparable harm" to importers' refund rights.
Therefore, Costco filed its lawsuit to protect its ability to obtain refunds before liquidation foreclosed its rights.
The Previous Urgency: CBP Liquidation Deadline
Because the IEEPA tariffs began in February, many import entries subject to these tariffs have already started to reach their liquidation dates. For Costco, this occurred around December 15, 2025.
As described above, once an entry is liquidated by CBP, it becomes much more difficult to recover duties—even if the Supreme Court later finds the tariffs unlawful. Costco highlighted this risk of "irreparable harm" in its complaint.
Korean companies that imported significant volumes in early to mid-2025 were also approaching these liquidation deadlines, and CBP has already begun to deny requests for extensions.
However, recent events have changed the level of urgency around these deadlines.
The Latest: (CIT) Ruling on Motions for Injunction
After the Costco lawsuit, hundreds of other importers also filed suits seeking to prevent CBP from liquidating entries subject to the challenged IEEPA tariffs.
In response, the government argued that no irreparable harm exists, because even if entries are liquidated, the CIT has "residual jurisdiction" under 28 U.S.C. § 1581(i) (which is separate from its general jurisdiction statute) to order CBP to reliquidate them and issue refunds if a favorable V.O.S. Selections decision results.
This week, the CIT denied the motions for injunction in the Costco and related cases, confirming its power under § 1581(i) to order reliquidation even after entries have been liquidated, should the Supreme Court invalidate the IEEPA tariffs.
With this ruling, the court rejected the "irreparable harm" argument and essentially adopted the government's position on reliquidation. Importantly, the CIT also estopped the government from later arguing the opposite – ensuring that in future litigation, the government cannot claim the court lacks authority to reliquidate previously liquidated entries.
Injunction Denied: What This Means
Some of the urgency around filing new cases has been reduced by these recent CIT decisions. Importers no longer need to file for injunctions to prevent liquidation, because the court has confirmed their right to later request reliquidation of their entries. All importers seeking refunds will now be permitted to file suit in the CIT seeking a holding ordering CBP as follows:
- to reliquidate any liquidated entries of the importer subject to IEEPA tariffs; and
- to refund all IEEPA tariffs paid on reliquidated and unliquidated entries subject to IEEPA tariffs.
Cases can be filed either before or after the Supreme Court decides the V.O.S. Selections matter. This provides more flexibility, but acting sooner may be advantageous for importers.
Is Filing a CIT Lawsuit Still Necessary?
Yes, filing a lawsuit may still be necessary.
Even if courts strike down IEEPA tariffs:
- Refunds may not be automatic.
- Each importer may need to file suit to preserve its own entries.
Thus, even if the Supreme Court ultimately invalidates IEEPA tariffs, it is possible that no company—including Korean multinationals—will receive refunds unless it files its own lawsuit.
When Should I File a Lawsuit?
Importers should consider filing a CIT case now. Waiting until after the Supreme Court issues its decision may put importers at a disadvantage, as there will likely be a surge of CIT filings if the Supreme Court rules in favor of importers. While there is no guarantee, filing now could allow an importer's case to be reviewed earlier, rather than being processed alongside potentially tens of thousands of cases expected after the V.O.S. Selections opinion.
Can a Korean Multinational's U.S. Subsidiary Sue?
In most cases, yes. Two conditions are required:
- Importer of Record (IOR): The entity that officially imported the goods and paid the duties has standing.
- IEEPA-Based Duties: The goods were declared under special Harmonized Tariff System (HTS) codes for IEEPA tariffs (appearing in Chapter 99 of the HTS), which were typically assessed at 15–25% on the value of Korean-origin goods.
If the U.S. subsidiary's entries included these codes, the same legal theory Costco is using likely applies.
Does Korean Ownership Matter?
No. Foreign ownership is irrelevant. Standing depends solely on who imported the goods and who paid the duties.
Immediate Action Items for Korean Exporters
The company's U.S. subsidiaries should promptly:
- Confirm importer-of-record status for all Korean-origin imports.
- Identify any entries using the specific Chapter 99 codes for IEEPA tariffs.
- Consider filing requests to CBP
- Prepare and submit a CIT complaint
- Move quickly—you may want to get ahead of the line.
A Strategic Opportunity—If You Act Now
Korean multinationals have paid hundreds of millions of dollars in U.S. tariffs under IEEPA. In light of recent CIT rulings, importers now have greater flexibility to safeguard their refund rights. However, the safest approach remains to file a CIT lawsuit promptly, ensuring that each importer's claims are preserved and prioritized ahead of any expected influx of cases following the Supreme Court's decision.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
