By Elisabeth Buchwald, CNN
(CNN) — President Donald Trump’s 10% across-the-board tariffs are in jeopardy after a federal court ruled them illegal on Thursday, dealing a second major blow this year to the president’s signature economic policy.
In a 2-1 ruling, the panel of judges at the US Court of International Trade found the administration lacked the justification to enact tariffs under a 1974 trade law known as Section 122. The administration began to enact these tariffs after a Supreme Court ruling earlier this year rendered its most sweeping levies illegal.
Thursday’s ruling calls for the administration to cease collecting these tariffs from the plaintiffs and refund prior payments. While only applicable to the impacted plaintiffs, it’s a major setback for the Trump administration and its tariff-enacting capacities.
Section 122 allows a president to impose tariffs up to 15% across all imports without getting congressional approval if certain criteria are met. In this instance, the judges found the administration’s argument for the tariffs insufficient.
The presidential proclamation putting the tariffs in place identifies no “large and serious United States balance-of-payments deficits’ as Congress understood that phrase,” the majority ruling notes.
The tariffs can continue to remain in place for all other importers besides the plaintiffs through July.
The only major tariff lever the administration appears to have currently in place are industry-specific tariffs. However, the administration has begun the process to potentially enact a set of additional country-wide tariffs.
The administration is expected to appeal Thursday’s ruling.
The Supreme Court ruled in February that a broad swath of Trump’s tariffs were illegal. In response, Trump swapped in new global tariffs that relied on then-untested legal authority under the Trade Act of 1974.
The legal cases reflect some of the chaos and uncertainty around Trump’s economic policies, with frequent announcements of new levies last year even as importers scrambled to understand the latest policy changes.
Much of the uncertainty remains. Importers are now able to apply for refunds for their payments under the tariffs that the Supreme Court struck down. But that refund process is expected to roll out in phases, and it’s unclear when the system will open for all payments subject to refund.
Payments could also be delayed if the administration takes further action that could affect the size of refunds.
This story has been updated.
The-CNN-Wire
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