On April 2, President Trump issued a proclamation imposing duties on certain pharmaceutical goods under Section 232 of the Trade Expansion Act of 1962, including up to 100% tariffs on certain patented pharmaceuticals and associated pharmaceutical ingredients. Tariffs will take effect for some companies on July 31, 2026, while other companies will see tariffs take effect on September 29, 2026. Exemptions from the tariffs include generics, pharmaceutical imports from companies who have reached 'Most Favored Nation' (MFN) deals with the administration, as well as pharmaceutical imports from countries who reach drug pricing agreements with the United States. The tariffs are also capped in certain cases pursuant to bilateral trade deals with US trading partners.

This action follows the Commerce Department's completion of an investigation and transmission of a report to the President regarding the national security impacts of imports of pharmaceuticals and pharmaceutical ingredients. The investigation was initiated by the Commerce Department on April 1, 2025.

Following a public comment period and investigation, the Secretary of Commerce has "found that the present quantities and circumstances of imports of pharmaceuticals and pharmaceutical ingredients threaten to impair the national security and economy." The proclamation identifies a reliance on pharmaceutical imports that has the potential to threaten access in the event of a geopolitical or global economic disruption and highlights the role of a domestic manufacturing base to support national defense and public health in the event of an emergency.

In response to these findings, the President is taking a number of actions. The proclamation imposes a 100% ad valorem duty on imports of patented and associated pharmaceutical ingredients as identified in Annex I. Goods identified in Annex IV are exempted from these tariffs. Click here for the Annex lists.

A 20% duty will be applied to those imports of patented pharmaceuticals and associated pharmaceutical ingredients "produced by companies that have plans, approved by the Secretary [of Commerce], to onshore production." The 20% rate would increase to 100% on April 2, 2030. The Secretary of Commerce, in coordination with the Secretary of Health and Human Services, is directed to publish in the Federal Register criteria for onshoring plans.

The proclamation also enacts pharmaceutical commitments in existing bilateral trade deals, including a maximum 15% duty rate on applicable goods from the EU, Japan, South Korea, Switzerland and Liechtenstein, as well as an initial 10% rate on goods from the UK, with the potential for duty-free treatment pending an anticipated US-UK deal based on the pharmaceutical pricing agreement in principle reached in December 2025. The Office of the U.S. Trade Representative (USTR) announced today that the deal with the UK has been finalized.

Further, the proclamation exempts from the tariffs companies with fully executed 'Most Favored Nation' (MFN) drug pricing deals or those negotiating MFN deals from tariffs through January 20, 2029, and directs the Secretaries of Commerce and Health and Human Services (HHS) to continue to pursue these agreements to address the national security concerns identified by the investigation. The initial list of companies that will be exempt under the MFN deals are listed in Annex II.

In addition, the proclamation does not impose tariffs on generics and associated ingredients at this time or on drugs and associated ingredients "where all approved indications are designated as orphan pursuant to the Orphan Drug Act and its implementing regulations; nuclear medicines; plasma derived therapies; fertility treatments; cell and gene therapies; antibody drug conjugates; medical countermeasures related to chemical, biological, radiological, and nuclear threats; or other specialty pharmaceutical products to be identified by the Secretary as well as pharmaceutical products for animal health … ." Such treatment, however, is predicated on a determination by the Secretary of HHS that: "(1) they are products of a jurisdiction that has a current or forthcoming trade and security framework agreement as referenced in Executive Order 14346 of September 5, 2025 (Modifying the Scope of Reciprocal Tariffs and Establishing Procedures for Implementing Trade and Security Agreements), or (2) they meet an urgent United States health need." The Secretary of HHS is required to "publish a Federal Register notice whenever he makes such a determination."

Tariffs imposed by this proclamation go into effect on July 31, 2026, for companies listed in Annex III, and on September 29, 2026, for all other companies.

Notably, the tariffs applied under Section 232 do not stack on existing tariff rates under Column 1 of the Harmonized Tariff Schedule of the United States (HTSUS), and instead importers are generally subject to the higher of the applicable rate in the proclamation and the Column 1 rate. Further, if a product is subject to more than one duty rate under the proclamation, the lowest rate will apply. The proclamation also clarifies that duty drawback remains available, and US-origin pharmaceutical goods are not subject to the tariffs.