Costco’s newly filed lawsuit in the U.S. Court of International Trade serves as a warning shot for companies that have been paying tariffs imposed under the International Emergency Economic Powers Act (IEEPA). Costco is challenging the legality of these duties and is asking the court to prevent U.S. Customs and Border Protection (CBP) from liquidating its entries, which Costco states are scheduled to begin liquidating as early as December 15, 2025.
The timing is significant. Once entries liquidate, an importer’s options for recovering duties become more limited, even if a court later determines that the underlying tariff was unlawful. That concern is not unique to Costco. Any importer that paid IEEPA duties on goods entered in late 2024 or early 2025 may face similar pressures as the statutory liquidation period approaches. Costco is one of several well-known companies pursuing similar litigation, including Revlon, Kawasaki Motors, Bumble Bee Foods and EssilorLuxottica, the parent company of Ray-Ban.
Below is an overview of the relevant legal framework and considerations for importers evaluating their own timelines.
Background: IEEPA Tariffs and the Costco Lawsuit
In 2025, President Trump used IEEPA to impose broad new tariffs on imports from Canada, Mexico, China and many other trading partners, including a “reciprocal” tariff program that layered new duty rates on top of existing trade measures. Costco’s complaint seeks declaratory and injunctive relief. The company challenges the lawfulness of IEEPA-based tariffs and aims to preserve its ability to obtain refunds of duties already paid.
According to the complaint, Costco has paid significant IEEPA duties on a continuous basis. Its entries subject to those duties are scheduled to begin liquidating on or after December 15, 2025, and at least one entry has already liquidated. Costco also states that CBP denied its request to extend liquidation on November 18, 2025.
To preserve its refund rights before liquidation occurs, Costco filed its action in the Court of International Trade on November 28, 2025 and indicates that it intends to seek a preliminary injunction that would halt liquidation.
What Is Liquidation and Why Does It Matter
Liquidation is the final computation of duties owed on an entry for consumption or drawback. Once CBP liquidates an entry, the importer receives notice of the final duty amount and any increase or refund.
Legal framework
- Under 19 U.S.C. Section 1504(a), CBP must liquidate an entry within one year of the date of entry unless liquidation is properly extended or suspended.
- In practice, CBP often liquidates entries at approximately 314 days after entry. This figure is not a legal requirement but reflects common timing identified in industry reports.
- Under 19 U.S.C. Section 1504(b), CBP may extend liquidation for up to one year if the importer shows good cause. Extensions are discretionary. Costco’s complaint notes that its request was denied.
After liquidation occurs
- The importer generally has 180 days to file a protest under 19 U.S.C. Section 1514, and only for issues that are legally protestable.
- Certain liquidations cannot be protested, including situations where CBP is carrying out a nondiscretionary duty calculation.
- The Court of International Trade has explained in prior tariff-related cases that entries which have already liquidated may fall outside the scope of the court’s authority to order refunds.
Because of these limitations, the period before liquidation is often the most important window for addressing potential tariff challenges.
Why December 15 Is Not a Universal Deadline
The December 15, 2025 date referenced in Costco’s complaint reflects Costco’s specific entry dates. It is not a government wide or tariff wide deadline for all importers.
However, it still provides a useful signal for the broader importing community.
- Many companies began paying IEEPA duties in early 2025.
- Entries made during that period are now approaching the one year statutory liquidation period.
- Using CBP’s typical 314 day practice, some early 2025 entries may already be within the liquidation time frame.
Costco’s experience also illustrates two practical realities for importers.
- CBP may decline to grant an extension of liquidation. Costco’s denied request indicates that extensions are not automatic.
- Liquidation can meaningfully limit refund options. Previous CIT decisions have noted that once entries liquidate, the court may be limited in its ability to grant relief. This is why some companies choose to seek injunctions before liquidation occurs.
For other importers, the key point is not Costco’s specific date but the need to evaluate individual entry timelines before liquidation begins.
Practical Steps for Importers Now
The December 15 liquidation date noted in Costco’s complaint applies specifically to its own entries based on early 2025 or late 2024 import dates. Other importers with similar entry timelines may face comparable deadlines as CBP approaches the one year statutory liquidation period, which, in practice, usually occurs around 314 days after entry. Because CBP has discretion to deny extensions and courts have warned that refunds may be unavailable after liquidation, it is critical for importers to act before their entries liquidate. To do so, importers should review their entry dates and monitor liquidation status through CBP’s Official Notice of Extension, Suspension and Liquidation portal or ACE reports, then file any necessary complaints or injunctions before liquidation occurs.
Looking Ahead
Three developments will shape the coming months for importers.
- Entries made in late 2024 and early 2025 are nearing CBP’s one year liquidation period.
- Once entries liquidate, available remedies become more limited.
- Costco’s lawsuit underscores the importance of acting before liquidation if an importer wishes to preserve potential refund rights.
A future court decision addressing the validity of IEEPA duties will not necessarily provide relief for entries that have already liquidated. Companies with meaningful IEEPA exposure should evaluate their timelines, financial risk and legal options now.
KJK’s litigation attorneys are available to review entry data, assess potential exposure and discuss strategies for preserving refund rights under the current legal landscape. To discuss further, please contact KJK Managing Partner (JJP@kjk.com; 216.736.7260) or reach another attorney at 216.696.8700.