Trump proclamation sets Section 232 tariffs on patented pharmaceuticals and APIs

President Donald Trump on April 2, 2026 issued a proclamation announcing that the United States will impose on July 31, 2026, a 100% Section 232 tariff on imports of certain pharmaceuticals and associated active pharmaceutical ingredients. The proclamation targets patented drugs following a Section 232 national security investigation, while generic pharmaceuticals and associated ingredients, including biosimilar products, are not subject to the tariff.

The tariff will operate as a floating rate: where a covered product is also subject to a non-duty-free Most-Favored Nation rate, the Section 232 tariff will be reduced so that the cumulative duty equals 100%; if the applicable MFN rate exceeds 100%, then only the MFN rate will apply. Patented pharmaceuticals and APIs from the United Kingdom will be subject to a 10% Section 232 tariff, while comparable products from the European Union, Liechtenstein, Japan, South Korea, and Switzerland will face a 15% rate.

Other product categories outside the scope of the new tariff include orphan drugs, nuclear medicines, plasma derived therapies, fertility treatments, cell and gene therapies, antibody drug conjugates, medical countermeasures related to chemical, biological, radiological, and nuclear threats, other specialty pharmaceutical products to be identified by the Department of Commerce, and pharmaceutical products for animal health.

The proclamation has carve-outs for companies with approved onshoring plans for covered pharmaceuticals and APIs, which will be subject to a reduced 20% Section 232 tariff starting September 29, 2026, increasing to 100% on April 2, 2030. Companies that have entered into MFN pharmaceutical pricing agreements, or are likely to be eligible soon because they have agreements in principle, will be subject to a 0% Section 232 tariff starting September 29, 2026, through January 20, 2029. One source said 17 big pharma companies that signed agreements with the U.S. government will pay either 0% or 20% tariffs, depending on deal terms.

According to the proclamation, the Department of Commerce initiated its underlying investigation in April 2025 and transmitted its final report to the President recently. The proclamation states that patented pharmaceuticals and associated pharmaceutical ingredients are essential to the United States’ military and civilian healthcare, and that approximately 53% of patented pharmaceutical products distributed domestically are produced outside the country. The proclamation also said only 15% of patented APIs by volume are domestically produced, leaving the country heavily dependent on foreign sources.

To mitigate the national security risks associated with this reliance, the proclamation directs the Secretary of Commerce and Secretary of Health and Human Services to negotiate agreements aimed at onshoring pharmaceutical and API production. Depending on the outcome of these negotiations, the President may revise the Section 232 tariff rates or adjust the scope of covered products, and a joint status report is due within 90 days, by July 1, 2026.