Section 232 pharmaceutical tariffs reach $142.9 billion of U.S. imports

The Section 232 tariffs on patented pharmaceuticals, in force since July 31 for the companies listed in Annex III of Proclamation 11020, apply to every other company from 12:01 a.m. eastern time on Sept. 29. The 149 tariff lines they cover carried $142.9 billion of U.S. imports in the 12 months to July 2026.

The headline rate is 100%, but most of that trade faces less. Goods from the European Union, Japan, South Korea, Switzerland and Liechtenstein, $120.6 billion or 84.4% of the total, pay 15% when patented, and generics owe nothing: "At this time, Section 232 Pharmaceutical Tariffs do not apply to generic pharmaceutical products and associated ingredients," the Commerce Department's Sept. 23 notice says. A 10-digit code does not show whether a product is patented, so the same line can owe 15%, 100% or nothing.

What the Sept. 23 notice adds

The notice (91 FR 60360) carries out clause 3(d) of Proclamation 11020, which sets a zero rate, under 9903.04.66, for specialty products: orphan drugs, nuclear medicines, plasma-derived therapies, fertility drugs, cell and gene therapies, antibody drug conjugates, medical countermeasures and animal health products. It defines each category. The zero rate applies if the products come from an eligible jurisdiction or meet "an urgent U.S. health need."

The eligible jurisdictions are Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, India, Indonesia, Japan, Jordan, Malaysia, North Macedonia, South Korea, Switzerland and Liechtenstein, Taiwan, Thailand, the United Kingdom and Vietnam. China is not on the list. For other origins, a company can apply to Commerce by email, one product per application; "Commerce will make an individual, fact-specific, company-specific decision for each request," and "CBP will administer the tariff adjustment at the time of entry summary filing."

Its changes to the schedule apply to goods "entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern time on September 29, 2026." They add 9903.04.70, at "the duty provided in the applicable subheading + 0%," for articles "solely for use in clinical trials, research and development, or other non-commercial applications." They limit "pharmaceutical articles" to finished products, their active ingredients and those ingredients' key starting materials ("Inactive ingredients and excipients are not pharmaceutical articles"), count "an unpatented animal health product" as a generic, and update the list of covered lines for the statistical changes of July 1.

Who pays what

U.S. note 40, the part of chapter 99 that governs these headings, makes them mutually exclusive: a pharmaceutical article is "subject to heading 9903.04.60 unless another of these headings applies."

The proclamation's rates apply to goods entered "on or after 12:01 a.m. eastern daylight time on July 31, 2026, for the companies listed in Annex III to this proclamation and September 29, 2026, for other companies." The 15% includes the ordinary duty. The transition heading, 9903.04.61, covered only goods of companies the Secretary identified, "imported before 12:01 am eastern time on September 29, 2026" (U.S. note 40(e)). Under the proclamation, the onshoring rate "shall increase to 100 percent on April 2, 2030," and when more than one rate could apply, "the lowest applicable rate shall apply." Free-trade partners get no reduction: under U.S. note 40(b), the duties "shall be collected in addition to any special rate of duty otherwise applicable under the appropriate tariff subheading."

How much trade the headings reach

The import.tax resolver sorts every line and origin by what the schedule settles on its own. For the 31 origins named in 9903.04.62 (the 27 EU members, Japan, South Korea, Switzerland and Liechtenstein) the 15% rate applies: $120.6 billion of imports from August 2025 to July 2026. For the 214 others, $22.3 billion, the treatment is conditional: no rate follows from origin alone, and an entry owes 100%, 20% or zero depending on the company. That group includes the United Kingdom, whose heading, 9903.04.63, the schedule carries at "+0%". No trade is classed as exempt: the zero-rate and generic headings turn on facts, such as patent status or end use, that no tariff line records.

The largest pairs are all in the 15% group. The import.tax lookup for monoclonal-antibody products (HTS 3002.15.00.11) from Germany, $14.5 billion over the 12 months, shows 15% under 9903.04.62 in place of the general rate of Free, with the 20% onshoring rate listed as conditional. Polypeptide hormones (2937.19.00.00) from Ireland, $13.8 billion, and vaccines for human medicine (3002.41.00.00) from Belgium, $5.2 billion, read the same. Each paid a duty rate of 0.0% over those 12 months, which end before the new rates began.

Across all 149 lines, the 12 months' duty came to $271.7 million, 0.19% of value. Of that, $216.8 million was on goods from China, $201.2 million of it from August 2025 through February 2026, before the IEEPA duties stopped being collected on Feb. 24.

What the Census data show so far

Census data run through July 2026, so no full month yet reflects the new rates. U.S. imports of pharmaceutical products (HS 30) were $45.8 billion in May–July 2026, down 8% from $49.5 billion a year earlier. Over 12 months they fell 25%, to $172.9 billion, from a base that included March 2025, the largest month in data back to 2010 at $31.7 billion.

In May–July, HS 30 imports from Ireland fell 16% to $8.4 billion, from India 24% and from Singapore 38%, while those from Switzerland rose 10%, Japan 49%, South Korea 38% and China 167%, to $2.4 billion from $906 million. Most of China's rise was in medicaments (HS 3004): $1.7 billion against $499 million, up 243%, with July alone at $677 million, the highest since February 2025. Those goods paid a duty rate of 0.02%, against 18.25% a year earlier; the rate fell after the IEEPA duties stopped being collected on Feb. 24.

Imports of hormones (HS 2937, in chapter 29, several of whose lines are covered) fell much further, to $595 million in May–July, down 91% from $6.8 billion. Imports from Ireland, which supplied 95.7% a year earlier, came in a few very large months, $17.3 billion in March 2025 and $13.5 billion in September 2025, and at most $72 million in any month since October 2025. The data do not show why any of these flows moved, and all of them predate Sept. 29.

What to watch

• Oct. 6: the Census Bureau releases August 2026 trade data, the first full month with the rates in force for Annex III companies. Nov. 4: September data, the first to include days at the rates for all companies.
• The notice says "Changes to the list of eligible jurisdictions may be published in a future notice."
• April 2, 2027: the proclamation's one-year deadline for the Secretary of Commerce to report any need to act on imports of generic pharmaceuticals.
• Jan. 20, 2029: the zero rate for companies with pricing agreements ends. April 2, 2030: the onshoring rate rises to 100%.