Sue the Trump administration

Costco is poking the Trump bear

Analysis by David Goldman, Matt Egan

Big public companies have mostly treated President Donald Trump with kid gloves during his second term. They’ve quietly avoided conflict while seeking favor with ornate gifts, large donations to his pet projects and strategic deployments of CEOs to the Oval Office.

That’s what made Costco’s decision last week to sue the Trump administration so shocking.

Costco on Friday filed a lawsuit that contends Trump overstepped his emergency powers by imposing sweeping tariffs – and claimed the company is due a refund.

Costco isn’t alone. A handful of other companies have separately sued the government on similar grounds, including Bumble Bee Foods, Ray-Bans parent EssilorLuxottica, Revlon and Kawasaki Motors. But Costco is the highest profile public company to do battle with the Trump White House on tariffs.

Few major corporations have been willing to publicly stick their necks out to combat Trump’s policies since he took office in January. That stands in contrast to his first term, when businesses and their leaders felt more comfortable speaking out – most notably when multiple CEOs quit his business council over comments Trump made in 2017 that downplayed neo-Nazi violence in Charlottesville, Virginia.

But Trump’s second term has largely been marked by Corporate America’s acquiescence. Several factors are at play:

• Trump has been willing to exact retribution on companies that lose favor with him.
• Big business has enjoyed Trump’s light regulatory touch, particularly on AI, which has exploded in growth and boosted the broader stock market.
• Getting on Trump’s good side can pay off. The famously transactional president has eased off some policies after companies won him over.

But if businesses are going to start speaking out against Trump’s policies, tariffs may be the logical place to start.

Tariffs are unpopular

Tariffs are broadly – and increasingly – unpopular with Americans, who connect them with the country’s affordability crisis.

A CBS News poll conducted in late October found that just 38% of Americans favor the United States placing new tariffs on goods imported from other countries. A clear majority, 62%, oppose. That marks a significant reversal from November 2024, when Americans narrowly favored new tariffs by 52% to 48% in a CBS News poll at that time.

Bigger picture, a poll published by Fox News last month showed only 15% of respondents said Trump’s policies are helping their financial situation, compared to 46% who said they are hurting.

So Costco is probably not going to anger too many customers by speaking out against a trade policy that is unpopular in the first place.

Costco didn’t appear overly concerned: It used some choice words in its lawsuit, decrying “the pell-mell manner by which these on-again/off-again” tariffs were “threatened, modified, suspended, and re-imposed, with the markets gyrating in response.” The company didn’t say how much it paid in tariffs, but it demanded that they be refunded in full.

The Supreme Court appeared ready to declare the bulk of Trump’s tariffs illegal, and Justice Amy Coney Barrett declared the refund process would almost certainly be “a mess.” Costco, seeing the handwriting on the wall, is trying to get in line early to collect.

Also, Costco may be uniquely situated. For example, the company doubled down on its diversity, equity and inclusion policies, or DEI, while many other companies rapidly abandoned them in the face of a pressure campaign from Trump and conservative media. And with its emphasis on value in the face of high prices, Costco has proven resilient with customers.

Trend or a one-off?

Going up against Trump’s tariffs has had mixed results. Some high-profile businesses that tried have been met with Trump’s wrath.

In April, White House Secretary Karoline Leavitt held up a photo of Amazon Chairman Jeff Bezos in a press briefing and publicly shamed the company for considering advertising tariff costs to customers. Trump similarly threatened Walmart after the company said it would raise prices because of tariffs.

In a variation on the theme, Apple said in May that it would shift its US iPhone production to India from China after Trump imposed steep tariffs that would cost it nearly $1 trillion a quarter. An upset Trump a couple weeks later in Qatar said he had “a little problem” with CEO Tim Cook because of Apple’s failure to bring iPhone production to the United States. By the end of the month, Trump had threatened a 25% tariff on Apple’s products.

But in August, Cook made a public appearance in the Oval Office, promising an additional $100 billion in US investment, and presented Trump with a plaque with a 24K gold base. The tariff threat vanished.

Still, with the Supreme Court decision looming and tariff popularity fading, some analysts believe Costco’s lawsuit could attract followers.

“I expect many other companies will do the same,” said Timothy Brightbill, a partner at Wiley who focuses on international trade.

Ed Mills, Washington policy analyst at Raymond James, agreed, arguing that Costco could give permission for some companies on the fence to file suit.

But some companies will still hesitate, he predicted.

“My guess is the more business you have before the federal government, the less likely you are to sue,” said Mills.