Section 232 Pharmaceutical Tariffs: What Starts July 31 and What Waits Until September 29

Last updated: July 31, 2026. This guide reflects Presidential Proclamation 11020, Annexes I through IV, the applicable Harmonized

Tariff Schedule provisions, and CBP CSMS #69395344.

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At 12:01 a.m. eastern time on July 31, 2026, Section 232 pharmaceutical tariff treatment took effect for products of the 17 companies identified in Annex III.

That does not mean every pharmaceutical shipment connected to those 17 companies now incurs a 100% duty.

The applicable treatment depends on the product, country of origin, importing company, patent and FDA status, government agreements, and which of ten mutually exclusive Chapter 99 headings applies. Thirteen of the 17 Annex III companies are also listed in Annex II, and CBP currently directs qualifying products of those companies to heading 9903.04.65, which carries no additional Section 232 duty. Other products may qualify for country-specific or product-specific treatment below 100%.

For products of companies not listed in Annex III, additional Section 232 duties generally do not begin until September 29, 2026. However, the filing requirements changed for everyone on July 31: importers entering goods under the affected Chapter 29 and Chapter 30 classifications must now report an applicable Chapter 99 heading, even when no additional duty is due.

The rule in one minute

The pharmaceutical Section 232 action has four central features:

• July 31, 2026: Tariff treatment begins for products of the 17 Annex III companies.

• September 29, 2026: Tariff treatment generally begins for products of other companies.

• July 31 filing requirement: All importers of goods under the affected Chapter 29 and Chapter 30 classifications must report an applicable heading from 9903.04.60 through 9903.04.69.

• The 100% rate is not universal: It is the default combined rate under heading 9903.04.60 when no lower applicable treatment governs.

For products of companies outside Annex III, CBP instructs importers to use zero-additional-duty heading 9903.04.61 from July 31 through September 28, 2026.

Why the February Supreme Court decision did not remove these tariffs

The pharmaceutical action was issued under Section 232 of the Trade Expansion Act of 1962, which authorizes import adjustments when the President determines that imports threaten to impair national security.

That is legally separate from the International Emergency Economic Powers Act, or IEEPA.

On February 20, 2026, the Supreme Court held that IEEPA does not authorize the President to impose tariffs. The decision invalidated the asserted use of IEEPA as tariff authority; it did not invalidate tariffs imposed under separate statutes such as Section 232 or Section 301. The pharmaceutical action therefore remains independently operative under Section 232.

The proclamation cited the United States’ dependence on foreign pharmaceutical production as part of its national-security findings. It reported that approximately 53% of patented pharmaceutical products distributed in the United States were produced abroad and that only about 15% of patented active pharmaceutical ingredients by volume were produced domestically for the U.S. market, based on FDA information as of 2025.

What products are covered

The action does not cover every product that might broadly be described as pharmaceutical or medical.

U.S. note 40 applies to specified HTSUS classifications located in Chapters 29 and 30. Within those classifications, the annex establishes separate definitions for pharmaceutical articles, patented pharmaceutical articles, generic pharmaceutical articles, and products that fall within the enumerated tariff classifications but are not pharmaceutical articles for purposes of the action.

A pharmaceutical article includes a qualifying pharmaceutical product or an active pharmaceutical ingredient or key starting material used to make a pharmaceutical product.

A patented pharmaceutical article generally includes a pharmaceutical article that is subject to a valid, unexpired U.S. patent and is listed in the FDA’s Orange Book or Purple Book, together with qualifying ingredients for those articles.

A generic pharmaceutical article must satisfy the more detailed definition in U.S. note 40. Among other conditions, it must be off patent and off exclusivity and be connected to a qualifying FDA application, including certain abbreviated new drug applications, qualifying Section 505(b)(2) applications, biosimilar applications, or authorized generic applications.

An HTS code alone does not determine the result

The base HTS classification establishes whether the article falls within one of the affected provisions. It does not, by itself, determine which Section 232 heading applies.

The importer may also need to establish:

• Whether the merchandise is a pharmaceutical article under U.S. note 40

• Whether it is patented or generic

• Whether the relevant product is listed in the Orange Book or Purple Book

• The product’s country of origin

• The company for which the merchandise is imported

• Whether that company appears in Annex II or Annex III

• Whether a Commerce or HHS agreement applies

• Whether a product-specific government determination has been issued

That is why two products under the same base HTSUS classification can receive different Section 232 treatment.

The two effective dates

July 31, 2026: Annex III companies

Products of the 17 companies listed in Annex III entered the new tariff-treatment structure on July 31, 2026.

September 29, 2026: other companies

Products of companies outside Annex III generally remain eligible for heading 9903.04.61 through September 28, 2026. That heading carries no additional Section 232 duty.

Beginning September 29, those imports must be entered under whichever of the remaining Chapter 99 headings is applicable to the product, company, origin, and circumstances.

Filing changed for everyone on July 31

The deferral for non-Annex III companies is a duty deferral, not a filing exemption.

Beginning July 31, all importers of goods classified under the affected Chapter 29 and Chapter 30 provisions must report an applicable heading from 9903.04.60 through 9903.04.69. For patented pharmaceutical articles imported for non-Annex III companies during the temporary period, CBP instructs filers to report 9903.04.61.

The 17 Annex III companies

Annex III identifies the companies whose tariff treatment became effective 120 days after the April 2 proclamation. The table also shows whether each company appears in Annex II, which contains the company-specific agreements entered into before the proclamation.

CBP states that heading 9903.04.65 applies to qualifying pharmaceutical articles associated with the Annex II companies and carries a 0% additional Section 232 rate.

The four Annex III entries that do not appear in Annex II are GlaxoSmithKline LLC and ViiV Healthcare Company, Johnson & Johnson, Pfizer Inc., and Regeneron Pharmaceuticals, Inc. Their products do not automatically incur the default 100% treatment, however. Country-of-origin treatment, product-specific treatment, generic status, U.S.-origin status, and other applicable headings must still be evaluated. If more than one rate could apply under the proclamation, the lowest applicable rate governs.

The ten Chapter 99 headings

The applicable headings run from 9903.04.60 through 9903.04.69. That is ten headings, not nine.

U.S. note 40 states that the headings are mutually exclusive, meaning one article is not entered under more than one of these pharmaceutical Section 232 headings.

CBP also reported that, as of its July 30 implementation guidance, no companies were currently eligible to claim heading 9903.04.64 based on a qualifying onshoring plan.

Heading 9903.04.66 is conditional

Heading 9903.04.66 addresses categories such as orphan drugs, nuclear medicines, plasma-derived therapies, fertility treatments, cell and gene therapies, antibody-drug conjugates, certain medical countermeasures, other identified specialty pharmaceutical products, and animal-health products.

These categories should not be treated as automatic exemptions based only on a commercial product description. The proclamation and U.S. note 40 require a qualifying government determination tied to a trade-and-security framework or an urgent U.S. health need, followed by the required notice and notification to CBP.

How the duty calculation works

The ten headings do not all use the same arithmetic.

Headings 9903.04.60 and 9903.04.62 use a combined-rate mechanism

For the default 100% heading and the 15% country heading, the ordinary Column 1 rate and the Section 232 component combine to reach the applicable total rate.

Assume, strictly for illustration, that the ordinary Column 1 rate is 6.5%:

If the applicable Column 1 rate is already higher than the prescribed combined rate, no additional Section 232 duty is due under that heading.

Headings 9903.04.63 and 9903.04.64 are additive under CBP’s filing guidance

1. The United Kingdom heading adds 10 percentage points to the applicable base duty.

2. The qualifying-onshoring heading currently adds 20 percentage points to the applicable base duty.

3. Using the same illustrative 6.5% Column 1 rate:

CBP describes the rates under 9903.04.63 and 9903.04.64 as additional ad valorem duty rates, while it expressly describes the rates under 9903.04.60 and 9903.04.62 as combined Column 1 and Section 232 rates.

These examples explain the arithmetic only. They are not product classifications or entry instructions.

Annex II, Annex III, and Annex IV do different things

The annexes should not be used interchangeably.

• Annex II: company-specific agreements

• Annex II lists 13 company-specific agreements entered into by the Secretary of Commerce before the proclamation. CBP connects applicable Annex II treatment to heading 9903.04.65 and a zero additional Section 232 rate.

• Annex III: the July 31 company list

• Annex III lists the 17 companies whose tariff treatment began July 31, 2026. It determines the earlier effective date; it does not establish one universal rate for every product associated with those companies.

• Annex IV: a zero-rate HTSUS code list

• Annex IV is not a company list. It contains HTSUS codes that are outside the tariff actions described in Annex I and that remain

*subject to the pharmaceutical Section 232 action at a zero rate.

An importer should therefore not use an Annex IV code to answer a company-status question, and should not use Annex III alone to determine the applicable rate.

What does not automatically remove the duty

A free trade agreement does not eliminate the Chapter 99 requirement

U.S. note 40 provides that the pharmaceutical Section 232 duties are collected in addition to an otherwise available special tariff rate under the listed free trade agreements and preference programs.

Preferential origin may affect the underlying duty rate, but it does not, by itself, eliminate the pharmaceutical Chapter 99 treatment.

Antidumping and countervailing duties continue

Any applicable antidumping, countervailing, or other duties and charges continue to be imposed in addition to the treatment under these pharmaceutical headings.

A foreign-trade zone generally defers rather than eliminates the liability

Covered products admitted into a U.S. foreign-trade zone on or after the applicable effective date generally must be admitted in privileged foreign status unless they qualify for domestic status. The applicable duty is then assessed when the goods are entered for consumption.

Drawback is available

The proclamation expressly makes drawback available for duties imposed under this action, subject to the ordinary eligibility, exportation, substitution, recordkeeping, and claim requirements that apply to the specific drawback program.

Does the new Section 301 forced-labor duty stack on top?

The final Section 301 forced-labor notice added patented pharmaceutical articles entered under headings 9903.04.60 through 9903.04.66 to the applicable exemption structure. Those patented pharmaceutical articles therefore are not also charged the new Section 301 forced-labor duty when properly entered under those headings.

The notice also establishes separate treatment for specified articles used in pharmaceutical applications.

Importers should not automatically extend the 9903.04.60-through-9903.04.66 exemption to generic pharmaceutical articles under 9903.04.67, U.S.-origin products under 9903.04.68, or non-pharmaceutical articles under 9903.04.69. Those entries must be reviewed separately to determine whether another exemption, including the pharmaceutical-application provision, applies.

Dates to monitor after July 31:

September 29, 2026

Heading 9903.04.61 ceases to be available for qualifying entries after September 28. Products of companies outside Annex III then move into whichever of the remaining headings is applicable.

By April 2, 2027

The Secretary of Commerce must inform the President of any circumstances that may warrant future Section 232 action on generic pharmaceuticals and their associated ingredients. Generics are excluded from additional Section 232 duties at this time, but the proclamation does not describe that treatment as permanent.

January 20, 2029

Heading 9903.04.65 is terminated and deleted from the HTSUS.

After that date, importers do not automatically move to heading 9903.04.64. They must determine whichever remaining heading is applicable under the law, HTSUS, company status, country of origin, and any government guidance then in effect.

April 2, 2030

The Chapter 99 rate associated with heading 9903.04.64 increases from 20% to 100% under the currently scheduled HTSUS modification.

Future Commerce determinations

The Secretary of Commerce retains responsibility for approving and monitoring onshoring plans, identifying qualifying specialty products, notifying CBP, and publishing required notices. The proclamation also permits tariffs to be reimposed prospectively and retroactively if the government determines that a company committed fraud or deliberately misled the government concerning onshoring commitments.

What importers should verify now

Before filing an affected entry, the importer and customs broker should verify:

1. The full ten-digit HTSUS classification.

2. Whether that classification is within the Chapter 29 or Chapter 30 provisions subject to U.S. note 40.

3. Whether the merchandise is a pharmaceutical article, patented pharmaceutical article, generic pharmaceutical article, or non-pharmaceutical article.

4. The manufacturer or company for which the product is imported.

5. Whether that company appears in Annex II or Annex III.

6. The legally supported country of origin.

7. Applicable patent, exclusivity, Orange Book, Purple Book, and FDA-application information.

8. Whether a qualifying government agreement or product determination has been communicated to CBP.

9. The appropriate heading from 9903.04.60 through 9903.04.69.

10. Any other applicable duties, including ordinary duty, antidumping or countervailing duty, Section 301 treatment, merchandise processing fees, and other charges.

The relevant information should be documented before entry rather than reconstructed after liquidation.

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Frequently asked questions:

Did a 100% pharmaceutical tariff begin for all 17 Annex III companies on July 31?

No. Tariff treatment began for products of those companies, but the applicable rate depends on the correct Chapter 99 heading. Thirteen Annex III companies also appear in Annex II, and CBP currently associates qualifying Annex II treatment with 9903.04.65 at a zero additional rate. Other country-specific and product-specific headings may also apply.

My supplier or manufacturer is not in Annex III. Do I have to report anything before September 29?

Yes. Beginning July 31, importers of goods under the subject Chapter 29 and Chapter 30 classifications must report an applicable pharmaceutical Chapter 99 heading. Patented pharmaceutical articles for companies outside Annex III generally use 9903.04.61 through September 28, with no additional Section 232 duty.

Are generic pharmaceuticals subject to the additional Section 232 duty?

Not at this time. Qualifying generic pharmaceutical articles are entered under 9903.04.67 without an additional Section 232 duty. The Secretary must report to the President within one year of the proclamation regarding circumstances that might warrant future action on generics.

What happens if the product originates in the European Union?

A qualifying patented pharmaceutical article that is a product of an EU member country may be entered under 9903.04.62, which uses a 15% combined Column 1 and Section 232 rate. If another lower heading applies, the proclamation directs that the lowest applicable rate be used.

Is the United Kingdom also on the 15% combined rate?

No. Qualifying UK-origin patented pharmaceutical articles are treated separately under 9903.04.63, which adds 10% to the applicable Column 1 duty rate.

Does an FTA certificate eliminate the pharmaceutical tariff?

No. U.S. note 40 states that the pharmaceutical duties are collected in addition to otherwise available special tariff treatment under the identified free trade agreements and preference programs.

Is every orphan drug or cell-and-gene therapy automatically exempt?

No. Heading 9903.04.66 is tied to specified product categories and required government conditions and determinations.

Importers should confirm that the necessary notice and CBP treatment apply to the specific product before claiming the heading.

Does the Section 301 forced-labor tariff apply in addition to the pharmaceutical tariff?

The final Section 301 notice exempts patented pharmaceutical articles properly entered under 9903.04.60 through 9903.04.66. Products entered under 9903.04.67 through 9903.04.69 require a separate review of the Section 301 exemption provisions.

Did the Supreme Court’s IEEPA ruling invalidate this action?

No. The Court held that IEEPA does not authorize tariffs. The pharmaceutical action rests on separate Section 232 authority.

Is duty drawback available?

Yes. The proclamation expressly provides that drawback is available, subject to the requirements applicable to the particular drawback claim.

Official sources

• Presidential Proclamation 11020, Adjusting Imports of Pharmaceuticals and Pharmaceutical Ingredients into the United States.

• Annexes I, II, III, and IV, including U.S. note 40 and headings 9903.04.60 through 9903.04.69.

• CBP CSMS #69395344, Guidance: Section 232 Duties on Imports of Patented Pharmaceutical Articles and Ingredients.

• Supreme Court opinion in Learning Resources, Inc. v. Trump.

• Final Section 301 forced-labor action and pharmaceutical exemptions.

This article is provided for general informational purposes and is not legal advice, customs advice, or a binding classification determination. Actual treatment depends on the merchandise, classification, entry date, origin, company status, FDA and patent information, applicable government determinations, and current CBP instructions. Importers should confirm entry treatment with a licensed customs broker or qualified customs counsel.