31.07.2026 Regulation #USA #Import #Duties
US imposes 100% tariff on patented drugs and APIs from July 31, 2026
A 100% additional Section 232 duty on imports of patented pharmaceuticals and active pharmaceutical ingredients (APIs) took effect in the United States on July 31, 2026. The tariff stems from a proclamation signed by President Donald Trump on April 2, 2026 (The White House). For now, the new rate applies only to the 17 companies listed in Annex III to the proclamation; for all other manufacturers and importers, it takes effect on September 29, 2026 (Crowell & Moring; Arnall Golden Gregory).
Covered products and exemptions
The 100% rate applies to patented (branded) drugs listed in the FDA's Orange Book (chemical drugs) or Purple Book (biologics), along with associated APIs and key starting materials specified in Annex I to the proclamation (AGG). The proclamation expressly carves out:
- generic drugs and biosimilars not covered by an unexpired patent;
- orphan drugs under the Orphan Drug Act;
- cell and gene therapies, fertility treatments, nuclear medicines and plasma-derived products;
- pharmaceutical products of US origin;
- R&D prototypes entered under tariff code 9817.85.01 (Crowell & Moring).
Reduced rates for specific categories of importers
Beyond the baseline 100% rate, the proclamation sets a tiered structure:
- 20% for companies with a production localization ("onshoring") plan approved by the Department of Commerce; this relief lasts only until April 2, 2030, after which the rate for these companies also rises to 100% (The White House; Crowell & Moring);
- 15% for products from the European Union, Japan, South Korea, Switzerland and Liechtenstein;
- 10% for products originating in the United Kingdom (Crowell & Moring; AGG);
- 0% for products of 13 companies (Annex II) that have entered into most-favored-nation (MFN) pricing agreements with the Department of Health and Human Services (HHS); this exemption expires on January 20, 2029 (AGG).
Who is affected and what it means for business
The tariff hits manufacturers of branded drugs, their distributors, and importers of active pharmaceutical ingredients into the US — effectively the entire pharmaceutical market outside the generics segment, which is explicitly exempt. Companies now need to recalculate landed costs, renegotiate contracts with overseas API suppliers and licensing partners, and weigh whether to apply for onshoring-plan status, which brings the rate down to 20% from 100% but comes with ongoing reporting obligations to the Department of Commerce. The Department of Commerce oversees implementation of the tariff, while US Customs and Border Protection enforces collection at the border (The White House).
How the tariff expands and rises through 2030
The proclamation's schedule breaks down as follows:
- July 31, 2026 — the tariff takes effect for the 17 companies listed in Annex III;
- September 29, 2026 — the tariff extends to all other market participants;
- January 20, 2029 — the exemption for 13 companies with HHS MFN pricing agreements (Annex II) expires;
- April 2, 2030 — the reduced 20% rate for companies with approved onshoring plans rises to 100%.
Primary sources
- Adjusting Imports of Pharmaceuticals and Pharmaceutical Ingredients into the United States (The White House)
- Trump Administration Imposes Section 232 Tariffs on Patented Pharmaceutical Imports (Crowell & Moring)
- Section 232 Tariffs on Pharmaceuticals: 100% Duties on Patented Drugs and APIs Starting July 31, 2026 (Arnall Golden Gregory)
Mentioned codes
This material is for information only and does not constitute legal advice or customs consulting. Verify changes against the primary sources before acting.