in effect
Proclamation 11020, signed April 2, 2026, is a presidential action under Section 232 of the Trade Expansion Act of 1962, which allows the president to restrict imports that threaten national security. It imposes new tariffs on imported patented pharmaceuticals and their active pharmaceutical ingredients (APIs), while directing the Commerce and Health and Human Services secretaries to negotiate agreements with drug companies to bring manufacturing back to the United States.
The default new tariff rate on covered patented pharmaceuticals and APIs is 100 percent, effective September 29, 2026 (July 31, 2026 for companies listed in Annex III). Companies with a Commerce-approved plan to move production to the United States pay a reduced rate of 20 percent until April 2, 2030, after which that rate rises to 100 percent. Companies that have both an approved onshoring plan and a Most-Favored-Nation pricing agreement with HHS pay zero tariff until January 20, 2029. Certain allied trading partners receive preferential rates: 15 percent for the EU, Japan, South Korea, and Switzerland/Liechtenstein; 10 percent for the UK, with a possible further reduction to zero if a bilateral pharmaceutical pricing deal is finalized. Generic drugs, biosimilars, orphan drugs, nuclear medicines, cell and gene therapies, and several other specialty categories are explicitly excluded from these tariffs at this time.
Foreign pharmaceutical manufacturers and their U.S. importers face the new duties and must provide Customs and Border Protection with documentation to determine which rate applies to their products. U.S. pharmaceutical companies that source patented drug ingredients abroad will see increased import costs unless they negotiate onshoring or pricing agreements with the federal government. The Commerce Secretary is required to publish criteria, monitor compliance, and can impose retroactive tariffs on companies found to have misrepresented their onshoring commitments.