100% Duties, Two Deadlines: Section 232 Pharmaceutical Tariffs Take Effect July 31, 2026

Executive Summary

Starting July 31, 2026, imports of patented drugs and their active ingredients from the 17 companies named in Annex III face Section 232 tariffs of up to 100%. Every other importer’s date is September 29, 2026. Onshoring plans, MFN pricing deals, and trade agreements can cut the rate, sometimes to zero. Generics, biosimilars, and U.S.-origin products are safe for now. Between now and your date: classify everything, confirm patent status, and model your landed costs.

Intro 

Section 232 has spent 64 years as the tariff law for steel, aluminum, and other heavy goods. But now, as of April 2, 2026, when President Trump signed a proclamation, it covers medicine. Patented drugs, their active ingredients, and the raw materials behind them are all on the hook for duties of up to 100%.

If you import any of that, you’ve got 1 of 2 dates circled. 

• July 31, 2026, if you handle products from the 17 drugmakers named in Annex III.
• September 29, 2026 if you’re anyone else. 

Either way, a product that cleared duty-free in June could cost double by fall.

We’ve been following this since spring in our tariff coverage, and with the first deadline two days out, it’s time to walk through it: who’s covered, what you’ll pay, where the outs are, and what to get done before your date.

What Did the April 2 Proclamation Do?  

Quick refresher on the law. 

Section 232 of the Trade Expansion Act of 1962 lets a president restrict imports that threaten national security. Commerce spent a year investigating pharmaceuticals, and the numbers gave them their answer: about 53% of the patented drugs sold in the US are made overseas, and only 15% of the active ingredients get made here.

So the April 2 proclamation hits patented drugs, the ones tied to a valid U.S. patent and listed in FDA’s Orange Book or Purple Book, plus their APIs and key starting materials. 

That’s more than 130 tariff lines across HTS Chapters 29 and 30, all filed under new Chapter 99 headings 9903.04.60 through .69.

Before anyone asks: No, February’s Supreme Court ruling doesn’t help you. That decision killed the IEEPA tariffs. Section 232 is a different law, and it’s still standing after this year’s court fights.

Two Effective Dates: July 31 for Annex III, September 29 for Everyone Else

The first deadline hits at 12:01 a.m. EDT on July 31, 2026, and it only covers products from the 17 companies in Annex III. That list reads like a pharmacy shelf: Pfizer, Johnson & Johnson, Merck, Eli Lilly, AbbVie, Amgen, AstraZeneca, Novartis, Sanofi, and eight more.

Everyone else gets until September 29, 2026. While in theory it sounds like plenty of time, consider how ocean transit moves. If your covered product ships from Asia in late August, it’s landing right on top of the deadline.

A couple of other things can trip people up. Thirteen of the 17 exposed companies already cut deals that sit in Annex II, so their day one rate follows the deal, not the default. There’s also no in-transit exception. What counts is the day your goods clear, not the day they sailed. 

Our customs brokerage team’s been fielding both questions constantly.

The Tiered Rate Structure: Who Pays 100%, 20%, 15%, or Zero

What does a covered shipment actually pay? Depends who made it and where it’s from. From the administration’s fact sheet:

• 100% if nothing else applies.
• 20% with a Commerce-approved onshoring plan, jumping to 100% on April 2, 2030.
• Zero through January 20, 2029, with both an onshoring plan and an HHS MFN pricing deal. The 13 Annex II companies live here.
• 15% for products of the EU, Japan, South Korea, and Switzerland-Liechtenstein. The U.K. pays 10% on top, maybe zero later.
• 0% for orphan drugs, cell and gene therapies, plasma-derived therapies, fertility treatments, antibody-drug conjugates, nuclear medicines, and animal health products, with conditions.

There’s one quirk to consider. For most tiers, the duty floats: your Column 1 rate plus the 232 duty adds up to the tier number, and when more than one rate fits, you pay the lowest. That’s why classification and duty optimization suddenly pay for themselves.

Exclusions and Duty-Saving Mechanics Importers Shouldn’t Miss

A shipment that looks covered at first glance may still qualify for an exclusion or a way to recover the duty later. Before adding the full rate to landed cost, check the product, its origin, its HTS classification, and what will happen to it after import. Each can change the amount owed.

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• Generics and Biosimilars: The proclamation keeps these products out of the tariff, though the words “at this time” deserve attention. Commerce has one year to recommend adding them, so 2027 forecasts should account for the possibility that the exclusion disappears.
• U.S.-Origin Products: The tariff doesn’t apply to products of the United States, including U.S.-made active pharmaceutical ingredients packaged into finished doses abroad. The exemption will depend on records that trace the imported medicine back to the U.S.-made API.
• Annex IV Products: More than 400 tariff lines receive a zero rate under Annex IV, including many antibiotics, vitamins, and hormones. Those same tariff lines also avoid the import surcharge announced in February, so the right HTS classification could remove both charges.
• Pharmaceutical Articles: The new forced-labor tariffs also leave out pharmaceutical articles. Before relying on that carveout, review the definitions and product coverage.
• Duty Drawback: Companies that import covered goods and later export them may be able to recover the duty through drawback, an option rarely available under Section 232. Preserve the entry, inventory, and export records from the beginning rather than trying to rebuild the paper trail afterward.
• Foreign-Trade Zones: Covered goods must enter an FTZ under privileged foreign status, which fixes the duty rate on the date of admission. Importers should compare the timing of FTZ admission, bonded movement, and final entry before deciding how to route the goods.

What’s Changed Since April and Your Pre-Deadline Checklist

The rules kept moving after April. 

In May, Commerce published the application procedures for those onshoring deals, and they want everything: investment commitments, U.S. production share, product detail down to HTS code and importer of record. First applications were due June 12, and approvals go straight to CBP, which checks claims at entry summary.

The White House says the pressure has already pulled in about $400 billion in promised U.S. pharma manufacturing. Also watch the one-year generics review, rate hikes for anyone who falls short, and new 232 investigations into PPE, medical consumables, and robotics.

Your homework: 

• Sort every SKU into Annex I or Annex IV.
• Confirm Orange Book or Purple Book status and the patent behind it.
• Nail down country of origin and the right 9903.04.6X heading.
• Model landed cost by tier, and make sure your bond can cover it. 
• Then track it all in myMALLORY.

One Partner for the Pharma Tariff Era

If there’s a theme here, it’s that none of this gets handled in a policy memo. It gets handled at the entry line, on the warehouse dock, and at the booking desk, one shipment and one HTS line at a time.

That’s been Mallory Alexander’s job for 100 years. Our licensed brokers are already filing the new Chapter 99 claims. And our compliance team is reclassifying products, running the landed-cost math under each tier, and pressure-testing sourcing before the duty bill shows up.

When the tariff forces bigger changes, we’re built for those too: time-critical air freight when duty timing wrecks a schedule, a managed logistics team when the workload outgrows yours, and decades of regulated chemical cargo behind all of it. In this business, the paperwork is the product.

If you’re one of the 17, this is already your Friday. If you’re not, you’ve got about 60 days, and the importers who use August well are the ones who’ll clear September without drama.

Got a shipment caught in this? Talk to a Mallory Alexander logistics expert about classification, entry filing, and duty mitigation before your first covered load hits the water, or call 1-800-257-8464.