Tariff Talk

100% tariff on pharmaceuticals. It’s been a headline ever since the word tariff became the U.S.’ go-to negotiation tactic. Effective today, new Section 232 tariffs go into effect on patented pharmaceuticals, but only for certain parties. Multiple exclusions apply, and in many cases, the tariffs are assessed at a reduced rate.

The Section 232 order outlines a tariff plan for Harmonized Tariff Schedule Chapters 29 (Organic Chemicals) and 30 (Pharmaceutical Products), with rate increases scheduled through 2030. The framework focuses on higher rates now for certain parties and countries while providing opportunities for exclusions or reduced rates through approved offshoring agreements and shipments from most-favored nations. The order also cites the lack of approved, or pending approval, offshoring agreements currently in the pipeline for the impacted commodities.

The initial 100% tariff applies only to specific parties and patented articles identified by HTS number, with many receiving a 60-day implementation delay. Reduced rates are available for imports from Japan, the European Union, Switzerland and Liechtenstein, and the United Kingdom. Throughout 2029 and 2030, many of these exclusions and reduced-rate provisions will expire, ultimately resulting in a 100% tariff on patented products within the identified HTS list for all parties and countries.

July has delivered on its promise of ending with new tariffs, from forced labor measures to pharmaceuticals. Trade is still on standby for additional guidance regarding powers of attorney and foreign importers, while also anticipating the rollout of Section 301 tariffs addressing excess capacity.