U.S. Imposes Section 232 Tariffs on Patented Pharmaceutical Imports (CBP Guidance and UK Duty Rate Update)
Published April 2, 2026 | August 2, 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.
President 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.
Latest Updates: 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.
CBP Guidance and Update on UK Duty Rate Reduction
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.
Why Were the Section 232 Tariffs Imposed?
The Commerce Secretary’s Section 232 investigation concluded that US dependence on imported pharmaceuticals poses a direct threat to national security. Key findings include: approximately 53% of patented pharmaceutical products distributed in the US are produced abroad; only 15% of patented APIs by volume are manufactured domestically; and foreign government intervention has undermined the competitiveness of the US patented pharmaceutical industry, creating fragile supply chains with limited domestic fallback in the event of geopolitical disruption.
The fact sheet notes that the impending tariffs have already spurred approximately $400 billion in new investment commitments from US and foreign pharmaceutical companies, to be spent in the United States during President Trump’s current term.
FTZs and Drawbacks
Covered pharmaceutical products admitted to a US foreign trade zone on or after the effective date must enter under “privileged foreign status” (19 CFR 146.41) unless eligible for domestic status. Drawback is available with respect to duties imposed by this proclamation. US-origin pharmaceutical products are not subject to the tariffs imposed by this proclamation.
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.
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