Section 232 tariffs on pharmaceuticals: 100% duties on patented drugs and APIs

Starting 31 July 2026, a new 100% tariff on patented pharmaceuticals triggered by Section 232 national security powers is set to reshape drug supply chains and import strategies across the U.S. Key exemptions, reduced rates, and a tight compliance timeline are already in motion.

By Luis F. Arandia Jr. and Clinton K. Yu

What are the new Section 232 pharmaceutical tariffs?

On April 6, 2026, the White House issued a presidential proclamation imposing Section 232 national security tariffs on patented pharmaceuticals and associated ingredients, including active pharmaceutical ingredients and key starting materials. The tariff action will affect pharmaceutical manufacturers, U.S. importers, and companies throughout the supply chain.

Section 232 of the Trade Expansion Act of 1962 authorises the president (via a U.S. Department of Commerce investigation) to impose tariffs based on national security concerns. On April 1, 2025, the Department of Commerce initiated the Section 232 investigation into imports of pharmaceuticals and pharmaceutical ingredients and their derivative products.

According to the proclamation, the Department of Commerce completed its investigation and determined that pharmaceuticals and associated active pharmaceutical ingredients ("APIs"), including key starting materials, are being imported into the U.S. in such quantities and under such circumstances as to threaten to impair U.S. national security.

Which pharmaceuticals and APIs are subject to Section 232 tariffs?

Effective July 31, 2026, an additional 100% duty will apply to the following products of certain companies in Annex III of the proclamation:

• Patented pharmaceutical articles that are subject to a valid, unexpired U.S. patent and:
  • listed in the U.S. Food and Drug Administration's Approved Drug Products With Therapeutic Equivalence Evaluations (Orange Book); or
  • listed in the FDA's Lists of Licensed Biological Products (Purple Book).
• APIs and key starting materials for such articles.
• Annex I of the proclamation provides a list of subject patented pharmaceutical products, APIs, and key raw materials, organised by Harmonized Tariff Schedule of the U.S. ("HTSUS") number.

Effective September 29, 2026, the additional 100% duty will apply to the same covered articles for other companies.

Which pharmaceutical products are exempt from Section 232 tariffs?

• Generic pharmaceuticals and their associated ingredients, which are defined as FDA-approved pharmaceutical articles, and associated ingredients that are not subject to a valid, unexpired U.S. patent and are out of exclusivity.
• U.S.-origin pharmaceutical products.
• Certain products classified by the HTSUS code listed in Annex IV of the proclamation.
• Products of 13 companies (listed in Annex II) that entered into most-favoured-nation pricing agreements with the U.S. Department of Health and Human Services ("HHS") will not be subject to any additional Section 232 tariff until January 20, 2029.

Are there reduced tariff rates by country or product type?

• For subject patented pharmaceuticals and APIs that are products of the European Union, Japan, South Korea, Switzerland, and Liechtenstein, the Section 232 duty rate will be 15%.
• For subject patented pharmaceuticals and APIs that are products of the United Kingdom, the Section 232 duty rate will be 10%.
• For subject patented pharmaceuticals and APIs produced by companies with approved onshore production plans with the Secretary of HHS, the additional Section 232 duty rate will be 20% until April 30, 2030.
• For the following speciality products, the Section 232 duty rate will be 0%.
  • Drugs and associated ingredients for all approved indications that are designated as orphan pursuant to the Orphan Drug Act;
  • Nuclear medicines;
  • Plasma-derived therapies;
  • Fertility treatments, cell and gene therapies, and antibody drug conjugates;
  • Medical countermeasures related to chemical, biological, radiological, and nuclear threats; and
  • Other speciality pharmaceutical products identified by the Secretary of Commerce or pharmaceutical products for animal health imported from a jurisdiction that has a current or forthcoming trade and security framework or that meet an urgent U.S. health need.

How to prepare for Section 232 pharmaceutical tariffs and how AGG can help?

AGG's International Trade and FDA practices advise companies on import compliance and CBP and FDA enforcement. Our teams can assist with:

• Tariff Classification Assessments: Confirm the HTSUS tariff classification of the imported products to assess whether the Section 232 pharmaceutical duties apply.
• Not Covered or Speciality Product Exemption Assessments: Determine the eligibility of whether certain products are not covered or speciality products that are exempt from the Section 232 tariff action.
• Country-of-Origin Assessments: Confirm the country of origin for subject products for countries that have Section 232 tariff preferential rates.
• Other Tariff Mitigation Strategies: Assessing potential duty drawback refund opportunities, duty deferral programs, and other tariff mitigation strategies.