With Trump’s tariffs deemed illegal by the Supreme Court, Costco stands to win big both financially and on reputation

Fortune

by Phil Wahba

February 20, 2026

AI-Generated Deep Dive Summary

Costco has emerged victorious in a significant legal battle against former President Donald Trump's tariffs, with the U.S. Supreme Court ruling them unconstitutional. This decision not only clears the way for potential refunds but also reinforces Costco's reputation as a customer-focused retailer willing to take risks to protect its business interests. The company had sued over the "Liberation Day" tariffs alongside other major businesses like Revlon and Kawasaki, challenging Trump's signature policy. The ruling is particularly notable because Costco was one of the first major U.S. companies to publicly oppose Trump on such a high-profile issue, despite the political risks. However, this move was not ideological but purely business-driven. Costco argued that the tariffs were unconstitutional and sought refunds for duties paid under the International Emergency Economic Powers Act. While the Supreme Court's decision didn't address the refund process directly, it left open questions about how this will be implemented. The company estimates that one-third of its U.S.-sold products are imported, meaning the potential financial impact could be substantial. Costco's strategy to adapt to tariffs by adjusting its product assortment has been praised by analysts. The company's CFO highlighted their ability to mitigate tariff impacts while maintaining competitive prices and value for customers. This approach aligns with Costco's broader business philosophy of running its operations independently, as seen in their resistance to outside pressures to change their business practices, such as their DEI (diversity, equity, and inclusion) programs. For readers interested in business, this story underscores how companies can navigate complex regulatory landscapes while staying true to their core values. Costco's victory not only boosts its bottom line but also burnishes its image as a retailer that prioritizes both customers and ethical decision-making. The case also highlights the broader implications of tariffs on U.S. businesses and the potential for refunds, which could have far-reaching economic effects.

Verticals

businessfinance

Originally published on Fortune on 2/20/2026