06.08.2026 Regulation #USA #Import #Duties #Trade agreements

US zeroes out Section 232 duty on UK patented pharma from July 31

The US Federal Register on August 4, 2026 published a notice (document 2026-15799) cutting the Section 232 additional duty on patented pharmaceuticals and pharmaceutical ingredients that are products of the United Kingdom — set out under HTSUS code 9903.04.63 — from 10% to 0% (Federal Register). The change is retroactive: it applies to goods entered for consumption starting 12:01 a.m. Eastern Time on July 31, 2026 — a date that precedes the notice's own publication (full text).

How the 9903.04.63 tariff line is structured

Presidential Proclamation No. 11020, "Adjusting Imports of Pharmaceuticals and Pharmaceutical Ingredients Into the United States," issued April 2, 2026, set several parallel Section 232 rates for patented pharmaceuticals, each under its own HTSUS code in the 9903.04.6x series. For the UK, the proclamation's text uses the same construction as for other carve-out countries: "the tariff rate... for products of the United Kingdom shall be 10 percent," worded in parallel to the rate for the EU, Japan, South Korea, and Switzerland and Liechtenstein: "...shall be 15 percent" (full proclamation text). Per CBP guidance, the 9903.04.6x rates are not cumulative with one another but alternative provisions: code 9903.04.63 (10%, now 0%) applies only to UK-origin goods and stands in lieu of the 100% baseline under code 9903.04.60, not on top of it; where a product could fall under more than one Section 232 code, "the lowest applicable rate shall apply" (CBP CSMS #69395344). Some legal alerts have described the UK rate as an add-on "in addition to the general 100% rate" (Crowell & Moring) — that reading is not supported by either the proclamation text or CBP's guidance and is not used here.

Context: sectoral pharma duties under Proclamation 11020

Proclamation 11020 (91 FR 18183) imposed duties under Section 232 of the Trade Expansion Act of 1962 on patented pharmaceuticals and ingredients. The baseline rate is 100% (code 9903.04.60); a reduced 15% applies to products of the EU, Japan, South Korea, and Switzerland and Liechtenstein (code 9903.04.62); companies with a Commerce Department-approved onshoring plan pay a 20% rate instead of the full duty, rising to 100% starting April 2, 2030 (code 9903.04.64); and companies with both an onshoring plan and an MFN pricing agreement with HHS concluded before April 2, 2026 are exempt (0%, code 9903.04.65) through January 20, 2029 (CBP CSMS #69395344). Against that backdrop, the bilateral "Arrangement... on Pharmaceutical Pricing," also concluded on April 2, 2026, carved the UK out into its own reduced-rate category — first at 10%, and now, following this week's Federal Register notice, at 0% (USTR).

What it means for importers

• Importers declaring patented drugs or pharmaceutical ingredients of UK origin under HTSUS 9903.04.63 can apply the 0% rate to entries filed since July 31, 2026, instead of the prior 10% (full text).
• Because publication came after the effective date, companies that already paid 10% on entries filed since July 31 should review those declarations and pursue a duty recalculation and refund — the notice ties the reduced rate to the entry date, not the publication date.
• This concerns specifically the Section 232 additional duty under code 9903.04.63: the general Column 1 rate and any other applicable special duties are collected separately and are not affected by this notice, per CBP guidance (CBP CSMS #69395344).
• Rates for other major suppliers of patented pharmaceuticals — the EU, Japan, South Korea, and Switzerland and Liechtenstein — remain unchanged at 15% under code 9903.04.62; this reduction applies only to UK-origin goods.

Why UK pharma had no transition period

Section 232 pharma duties under Proclamation 11020 phased in in stages: the 100% baseline rate under code 9903.04.60 took effect for companies listed in Annex III starting July 31, 2026, while other companies remained under a transitional 0% rate under code 9903.04.61 until September 29, 2026 (CBP CSMS #69395344). The UK rate is not tied to that company-based schedule but to the proclamation's overall effective date of July 31, 2026, so the zero rate took hold for UK goods immediately, with no intermediate step. The notice's text also makes the concession conditional: the zero rate applies "as long as the requirements of section IV.1.a" of the pricing Arrangement "are currently being met" — that is, as long as the UK honors its agreed commitments on NHS drug pricing (full text). That conditional framing, rather than an unconditional statement of duration, in the editors' reading means the concession is not guaranteed indefinitely and could be revisited if those commitments lapse — though the notice itself does not spell out a review procedure.

Primary sources

• Notice of Reduction of Tariffs on Patented Pharmaceuticals and Pharmaceutical Ingredients for Products of the United Kingdom
• Proclamation 11020, Adjusting Imports of Pharmaceuticals and Pharmaceutical Ingredients Into the United States
• CBP CSMS #69395344 — GUIDANCE: Section 232 Duties on Imports of Patented Pharmaceutical Articles and Ingredients
• Crowell & Moring: Tiered Rate Structure Takes Effect Beginning July 31, 2026
• USTR: Successful Conclusion of the United States–United Kingdom Arrangement on Pharmaceutical Pricing

This material is for information only and does not constitute legal advice or customs consulting. Verify changes against the primary sources before acting.