The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued guidance on September 21 clarifying the implementation of Section 232 tariffs on pharmaceuticals and pharmaceutical ingredients under Presidential Proclamation 11020.
The tariffs are scheduled to take effect at 12:01 a.m. ET on September 29, 2026. The new guidance addresses several questions regarding the scope of the tariffs, products eligible for a zero percent Section 232 tariff rate, qualifying countries, and applicable Harmonized Tariff Schedule of the United States (HTSUS) provisions.
Specialty Pharmaceuticals Eligible for a 0% Section 232 Rate
Commerce provided definitions for specialty pharmaceutical products that may qualify for a zero percent Section 232 tariff rate. These include:
- Drugs for which 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 threats
- Animal healthcare products
Eligible Jurisdictions
Commerce identified the following jurisdictions as eligible for the zero percent Section 232 rate for qualifying specialty pharmaceutical products:
Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, India, Indonesia, Japan, Jordan, Malaysia, North Macedonia, the Republic of Korea, Switzerland and Liechtenstein, Taiwan, Thailand, the United Kingdom, and Vietnam.
The impacted HTSUS classifications and countries are detailed in Annexes 1 and 2 of the Federal Register notice.
Additional Clarifications for Importers
The Commerce guidance also addresses several other important issues:
- Urgent U.S. health needs: Companies may request Commerce approval for imports of pharmaceutical products that meet an urgent U.S. health need. Products approved through this process may qualify for the zero percent Section 232 tariff rate.
- Generic pharmaceutical articles: Commerce modified the definition of “generic pharmaceutical articles” to specifically include unpatented animal health products.
- Clinical trials and R&D: A new Chapter 99 provision, HTSUS 9903.04.70, provides a zero percent Section 232 tariff rate for articles solely for use in clinical trials, research and development, or other non-commercial applications.
- Definition of pharmaceutical articles: Commerce clarified that “pharmaceutical articles” covers finished pharmaceutical products, their active pharmaceutical ingredients (APIs), and the key starting materials of those APIs.
- HTSUS 9903.04.69: Commerce clarified that this provision covers articles that are not “pharmaceutical articles,” as well as pharmaceutical articles that are neither patented nor generic.
- Annex IV corrections: Five HTSUS subheadings were removed from Annex IV to address overlaps with Annex I: 2937.23.50, 3002.13.00, 3002.14.00, 3002.15.00, and 3004.49.00.
What Should Importers Do?
With the September 29 effective date approaching, importers of pharmaceuticals, APIs, and related products should review their classifications and supply chains to determine whether their products fall within the affected HTSUS provisions and whether any of the newly clarified zero percent Section 232 tariff provisions may apply.
Importers should pay particular attention to country of origin, product type and intended use, including whether merchandise may qualify as a specialty pharmaceutical product, an article intended solely for clinical trials or R&D, or a product meeting an urgent U.S. health need.
A.N. Deringer will continue to monitor implementation guidance from Commerce and related instructions from U.S. Customs and Border Protection (CBP) and will provide additional updates as they become available.
Due to the rapidly changing application and modifications of duty rates, please note that Deringer is not responsible for coordinating the timing of U.S. entry and imposed tariff rates.
