‘It should pass through Costco back into our pockets’: Jake, Spike weigh in on Costco’s tariff refund

Costco’s massive tariff refund — totaling more than $180 million — led KIRO hosts Jake Skorheim and Spike O’Neill to debate who should really receive it.

Costco confirmed on an earnings call this week that it received $184 million in tariff refunds from the federal government, consisting of $174 million in refunds plus $10 million in interest, following a Supreme Court ruling that found President Donald Trump’s use of the International Emergency Economic Powers Act to impose tariffs was unconstitutional.

“During the height of all the tariff wars, Costco ended up having to charge more for certain items that became more expensive for them to import based on those tariffs. And like any company, a tariff is a tax, and like any tax, when you make something more expensive for the company, the company passes those taxes on to the purchaser,” Jake said. “Costco made things more expensive because that’s the way business works, and now they’re going to be receiving a refund check to the tune of about $184 million in tariff refunds.”

A proposed class-action lawsuit filed earlier this year in federal court in Seattle, led by Seattle attorney Timothy Emery of Emery Reddy, argued Costco shouldn’t be allowed to keep those refunds since customers, not the company, ultimately paid the higher prices.

“I think we can all agree that if a company passes along tariff charges, they should give it back,” Emery said. “Without this lawsuit, Costco stands to recover the same tariff payments twice — once from its loyal customers through higher prices, and again from our government, and that’s with interest.”

KIRO 7 asked a Costco shopper whether he’d rather see a direct refund or simply lower prices going forward.

“Either way, as long as they return the money they got and make a clear plan and articulate it, it seems fair, right?” the shopper said, adding that he didn’t feel Costco had communicated its plan clearly. “I just learned about it from you, so I’d say no.”

Spike said he’s sympathetic to the lawsuit’s core argument, since Costco’s broader price cuts don’t necessarily benefit the people who actually paid the tariff-inflated prices.

“Why are you going after — I appreciate they’re going after Costco, but there are so many companies who made massive amounts, and the companies didn’t get — they just passed through,” O’Neill said. “Costco is getting a refund because Costco paid those tariffs that we paid onto the government. It passed through Costco on the way to the government. It should pass through Costco back into our pockets.”

Jake raised a practical complication with issuing direct refunds: shoppers who didn’t buy tariff-affected items during that window would benefit from storewide price cuts without ever having paid the higher prices themselves.

“If you didn’t purchase diapers during the higher tariffs, and yet now you’re going to see a benefit from lower prices, then you’re kind of benefiting in a way that you weren’t penalized,” Jake said. “I’m OK with the lower prices. That is a thing that I would like.”

Spike agreed broader price cuts don’t fully solve the fairness problem the lawsuit raises, since non-tariff-affected shoppers benefit equally.

“People who didn’t buy anything during the tariffs are going to get the benefit thereof, not those of us who directly had money come from our pockets to pay these tariff costs,” Spike said.

Watch the full discussion in the video above.

Listen to “The Jake and Spike Show” weekdays from noon to 3 p.m. on KIRO Newsradio 97.3