U.S. Imposes Section 232 Tariffs on Patented Pharmaceuticals (BIS Specialty Pharmaceutical Tariff Guidance)

Published April 2, 2026 | Sept. 22, 2026

Key Points

• 100% tariff: Applies to patented pharmaceuticals and associated active pharmaceutical ingredients (APIs) listed in Annex I.
• Effective dates: July 31, 2026 for certain large companies listed in Annex III; September 29, 2026 for all other companies.
• Trade deal countries: 15% rate for EU, Japan, South Korea, and Switzerland/Liechtenstein; reduced rate for the UK under the recently concluded pharmaceutical agreement.
• Onshoring + MFN pricing: 0% rate through January 20, 2029 for companies that enter into both MFN pharmaceutical pricing agreements with HHS and onshoring agreements with Commerce.
• Onshoring only: 20% rate for companies with Commerce-approved onshoring plans; increases to 100% on April 2, 2030.
• Generics exempt: Generic pharmaceuticals, biosimilars, and their ingredients are not subject to Section 232 tariffs at this time. Reassessment due within one year.
• Specialty products exempt: Orphan drugs, nuclear medicines, plasma-derived therapies, fertility treatments, cell and gene therapies, antibody drug conjugates, CBRN medical countermeasures, and animal health products may qualify for a 0% rate.
• CBP Guidance: CBP issued entry filing guidance on July 30, 2026, requiring importers to report applicable Chapter 99 HTSUS classifications for covered pharmaceutical products and ingredients classified under Chapters 29 and 30, effective July 31, 2026.
• Section 232 Pharmaceutical HTSUS Classification List attached
• UK Duty Rate Update: CBP issued additional guidance on August 1, 2026, confirming that qualifying patented pharmaceuticals and pharmaceutical ingredients from the United Kingdom are subject to a 0% additional duty rate under HTSUS 9903.04.63.
• Latest: On September 21, 2026, BIS issued guidance defining specialty pharmaceutical products and associated ingredients that may qualify for a 0% tariff rate under Proclamation 11020, along with procedures for requesting the tariff treatment.

P​​​​​​​​​​​​​resident Trump signed a proclamation on April 2, 2026, imposing Section 232 tariffs on patented pharmaceuticals and associated active pharmaceutical ingredients (APIs), citing national security concerns over US dependence on foreign production.

In this Update: Click any section below to jump directly to the update you need.

• Latest Update: BIS Specialty Pharmaceutical Tariff Guidance
• July 30 Entry Filing Guidance
• Background Info on April 2 Proclamation
• Why Were the Section 232 Tariffs Imposed
• FTZs and Drawbacks

Latest: Commerce Issues Specialty Pharmaceutical Tariff Guidance

On September 21, 2026, the Bureau of Industry and Security (BIS) issued guidance defining the specialty pharmaceutical products and jurisdictions eligible for a 0% ad valorem tariff rate under clause 3(d) of Proclamation 11020.

The covered products include:

• Drugs where all approved or licensed indications are designated as orphan
• Nuclear medicines
• Plasma-derived therapies
• Fertility drugs
• Cell therapy products
• Gene therapy products
• Antibody drug conjugates
• Medical countermeasures related to chemical, biological, radiological, and nuclear (CBRN) threats
• Animal healthcare products

The 0% rate applies when Commerce determines, in consultation with the U.S. Trade Representative and the Secretary of Health and Human Services, that the products are from a jurisdiction with a current or forthcoming trade and security framework agreement or that they meet an urgent U.S. health need.

Eligible Jurisdictions for 0% Specialty Pharmaceutical Tariff Rate

BIS lists the following eligible jurisdictions: Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, India, Indonesia, Japan, Jordan, Malaysia, North Macedonia, Republic of Korea, Switzerland and Liechtenstein, Taiwan, Thailand, the United Kingdom, and Vietnam.

Request 0% Tariff Treatment for Urgent U.S. Health Needs

Companies may request Commerce approval for specialty pharmaceutical products that meet an urgent U.S. health need by submitting information to pharma232@bis.doc.gov. Each application may cover only one specific product and must include the product’s HTSUS classification, product and active ingredient information, applicable category, country of origin and export, importer of record information, manufacturer information, and the rationale for the urgent U.S. health need.

HTSUS Corrections for Pharmaceutical Tariffs

BIS also made five technical corrections to Annex I and one correction to Annex IV of Proclamation 11020. The changes include:

1. Adding HTSUS 9903.04.70 for covered pharmaceutical articles and associated ingredients used solely for clinical trials, research and development, or other non-commercial applications, with a 0% additional duty.
2. Clarifying that pharmaceutical articles include finished pharmaceutical products, active pharmaceutical ingredients, and key starting materials, while inactive ingredients and excipients are not pharmaceutical articles.
3. Adding unpatented animal health products to the definition of generic pharmaceutical articles.
4. Clarifying the scope of HTSUS 9903.04.69.
5. Updating Annex I to reflect HTSUS changes made July 1, 2026.
6. Removing HTSUS codes 2937.23.50, 3002.13.00, 3002.14.00, 3002.15.00, and 3004.49.00 from Annex IV.

For the updated HTSUS provisions and tariff classifications, see Annex I and Annex II of the notice.

The HTSUS changes take effect for goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern time on September 29, 2026.

Previous Updates

CBP Issues Entry Filing Guidance

On July 30, 2026, CBP issued entry filing guidance for the new Section 232 duties, requiring importers to report applicable Chapter 99 HTSUS classifications for covered products effective July 31, 2026. On August 1, 2026, CBP issued additional guidance confirming a 0% additional duty rate under HTSUS 9903.04.63 for qualifying UK pharmaceutical products and ingredients effective the same date.

Entry Filing Requirements

• Effective July 31, 2026, importers of goods classified under the applicable HTSUS provisions in Chapters 29 and 30 must report the applicable Chapter 99 HTSUS classification.
• CBP provided instructions for importers, brokers, and filers submitting entries for patented pharmaceutical products and associated ingredients under HTSUS headings 9903.04.60–9903.04.69.

For the list of applicable Chapter 29 and 30 HTSUS classifications, see the attached Section 232 Pharmaceutical HTSUS Classification List.

For products of the United Kingdom, importers must report HTSUS heading 9903.04.63 for qualifying patented pharmaceutical articles and associated ingredients eligible for the 0% additional duty rate.

Effective Dates

• Section 232 duties apply beginning July 31, 2026, for products of companies listed in Annex III of Proclamation 11020.
• Section 232 duties apply beginning September 29, 2026, for products of all other companies.
• From July 31 through September 28, 2026, importers of covered products from companies not listed in Annex III must file HTSUS 9903.04.61, which carries a 0% additional duty rate.

• For qualifying United Kingdom products, the 0% additional duty rate under HTSUS 9903.04.63 applies to entries filed on or after July 31, 2026.

Chapter 99 Duty Classifications

• 9903.04.60: 100% ad valorem duty rate for covered patented pharmaceutical articles.
• 9903.04.61: 0% additional duty rate for covered products of companies not listed in Annex III before September 29, 2026.
• 9903.04.62: 15% ad valorem duty rate for products of Japan, EU member countries, South Korea, Switzerland, and Liechtenstein.
• 9903.04.63: 0% additional duty rate for patented pharmaceutical articles and associated ingredients that are products of the United Kingdom.
• 9903.04.64: 20% additional duty rate for products subject to a qualifying onshoring plan. The rate increases to 100% on April 2, 2030.
• 9903.04.65: 0% additional duty rate for products subject to qualifying onshoring plan and MFN pharmaceutical pricing agreements. This classification expires January 20, 2029.
• 9903.04.66: 0% additional duty rate for eligible drugs and pharmaceutical articles for specified uses.
• 9903.04.67: 0% additional duty rate for generic pharmaceutical articles.
• 9903.04.68: 0% additional duty rate for pharmaceutical products with a U.S.-origin active pharmaceutical ingredient packaged in dosage form.
• 9903.04.69: 0% additional duty rate for certain articles classified under the applicable Chapter 29 and 30 HTSUS provisions that are not pharmaceutical articles.

Additional CBP Clarifications

• If a product qualifies for more than one Section 232 duty rate under Proclamation 11020, the lowest applicable rate applies.
• U.S.-origin pharmaceutical products are not subject to the Section 232 tariffs.
• Products eligible for trade agreement or preference program treatment remain subject to Section 232 duties in addition to applicable special tariff rates.
• Drawback is available for duties imposed under Proclamation 11020.
• Covered products admitted into a U.S. foreign trade zone must be admitted under privileged foreign status unless eligible for domestic status.

Background Info on the April 2 Proclamation

Rate Structure

The applicable rate for any given company or product depends on origin, whether an onshoring plan has been approved by Commerce, and whether a Most Favored Nation pricing agreement has been executed with HHS.

100% – Standard rate
Applies to all patented pharmaceuticals and APIs in Annex I where no reduced rate applies. Default for companies without onshoring or pricing agreements. Effective September 29, 2026 for most companies.

20% – Onshoring plan approved
For companies with Commerce-approved onshoring plans, or those assessed as likely to have one soon. Rate increases to 100% on April 2, 2030. Subject to periodic reporting, external audits, and enforcement. Fraud or misrepresentation may result in retroactive tariff reimposition.

15% – Trade deal countries
Applies to products of the EU, Japan, South Korea, and Switzerland/Liechtenstein.

The United Kingdom previously qualified for a reduced 10% rate under the U.S.-UK pharmaceutical agreement. An August 1, 2026 CBP guidance confirms that qualifying UK products now receive a 0% additional duty rate effective July 31, 2026.

0% – United Kingdom
Products of the United Kingdom that meet the requirements under Proclamation 11020 qualify for a 0% additional duty rate under HTSUS 9903.04.63 effective July 31, 2026.

0% – Onshoring + MFN pricing
Companies that execute both a Commerce onshoring plan and an HHS MFN pharmaceutical pricing agreement pay zero tariff through January 20, 2029. Also applies to companies with agreements in principle assessed as likely to qualify soon.

Exempt – Generics & specialty products
Not subject to Section 232 tariffs at this time. Commerce to review and report to the President within one year on whether action on generics is warranted.

Specialty & orphan products
Orphan drugs, nuclear medicines, plasma-derived therapies, fertility treatments, cell and gene therapies, antibody drug conjugates, CBRN countermeasures, and animal health products. Exemption requires the product to be from a trade deal country or meet an urgent US health need, as determined by Commerce in consultation with USTR and HHS.

If a product is subject to both a Section 232 tariff and a Column 1 HTSUS duty, the combined rate is capped at the applicable Section 232 rate. If the Column 1 rate exceeds the Section 232 rate, only the Column 1 rate applies. Where more than one Section 232 rate could apply, the lowest applicable rate governs.

FTZs and Drawbacks

The information presented is general in nature, and is not intended to constitute legal advice with respect to any event or occurrence, and may not be considered as such.​​ Information has been obtained from sources believed to be reliable. However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.​ Due to the complexity of Customs Regulations, valuations are based on information currently available and should not be considered binding, we recommend obtaining National Customs Rulings in areas of uncertainty.​

How GHY Can Help?

GHY specializes in helping businesses navigate and reduce the impacts of tariffs through strategic solutions tailored to their needs. Our experts can audit your supply chain to identify inefficiencies, uncover cost-saving opportunities, and ensure compliance with evolving trade regulations. We also employ tariff engineering techniques to optimize product classification and sourcing strategies, minimizing duty exposure and maximizing profitability.

By partnering with GHY, your business gains access to the tools and expertise needed to streamline operations and stay competitive in a challenging trade environment.

Contact Us Today! Booking a Meeting, email consult@ghy.com, or call +1 (800) 667-0771.