The Home Furnishings Association (HFA) is aware that many retailers have been following the recent news regarding Costco’s tariff lawsuit, which challenges newly imposed federal tariffs, and may be wondering about the implications this situation could have for their own importing practices. To ensure members remain informed, HFA is sharing the original article, along with additional context to help clarify this complex and evolving issue.
Costco’s lawsuit aims to secure refunds on tariffs it has already paid this year and to prevent additional duties from being collected at the same time, the Supreme Court reviews the legality of these new IEEPA-based tariffs. Lower courts have already ruled that the President does not have authority under the International Emergency Economic Powers Act (IEEPA) to impose broad “reciprocal” and “fentanyl” tariffs, and dozens of companies have filed similar protective suits. Costco’s concern stems from a looming December 15 liquidation deadline—after which some tariff payments may no longer be refundable, depending on the Supreme Court’s ruling.
To understand why this matters, it helps to briefly review how the Customs Entry and liquidation process works. When an entry is filed, importers pay estimated duties to U.S. Customs and Border Protection. Afterward, Customs typically takes 10 to 12 months, sometimes more, sometimes less, to review the entry and determine whether the estimated duties are accurate. In the vast majority of cases, roughly 90 to 95 percent, Customs accepts the importer’s estimate and proceeds to “liquidate,” or finalize, the entry. With most liquidations occurring within a year, Customs has an internal target of 314 days. Once liquidation occurs, importers have 180 days to either accept the finalized duties or file a protest. After that 180-day window closes, no further changes or refunds can be made, and the entry becomes final under U.S. Customs regulations.
At the same time, the President utilized the International Emergency Economic Powers Act (IEEPA) earlier this year to impose additional duties on certain trading partners deemed harmful to the U.S. economy. This led to the creation of two new tariffs: the IEEPA “Fentanyl” tariff, which added duties on imports from China and, in some cases, Canada and Mexico, and the IEEPA “Reciprocal” tariff, which applied additional duties to goods from nearly every country, with rates varying by origin. Importers challenged these tariffs and won in both the Court of International Trade and the U.S. Court of Appeals, prompting the Administration to appeal to the Supreme Court. While the Court has shown skepticism toward the tariffs’ legality, it has not indicated when a final ruling will be issued. If the tariffs are ultimately struck down, it is expected, but not guaranteed, that the duties already paid will be refunded; however, the refund process itself remains uncertain.
So why did Costco file its own lawsuit?
Costco is attempting to protect its refund rights before its entries liquidate. Customs denied Costco’s request to extend liquidation while the Supreme Court deliberates—an unusual move, but one Customs believes is legally permissible. Costco is now seeking the Court of International Trade’s intervention. It is important to note that the December 15 liquidation date applies only to Costco’s entries, not all importers.
What does this mean for furniture retailers and other importers?
At this moment, while the industry awaits the Supreme Court’s ruling, most importers have only two practical options available to preserve their potential refund rights. The first option is to file a request for a liquidation extension. Although Costco’s extension request was denied, this does not necessarily mean other importers will face the same outcome.
The second option is to engage a customs attorney and file suit in the Court of International Trade (CIT). This is the strongest legal mechanism for protecting refund eligibility, but it is also the most costly. A CIT lawsuit typically begins at approximately $30,000 to $50,000 and can increase depending on the complexity of the case.
HFA Will Continue to Monitor and Update Members
This situation is evolving rapidly, and many regulatory interpretations remain unclear. The Home Furnishings Association is actively monitoring developments at the Supreme Court, U.S. Customs, and the Court of International Trade. As new information becomes available and the formal processes begin to take shape, HFA will continue to provide timely updates to help retailers understand their options and prepare for any potential impacts.
