TRADE POLICY | 2026-09-22

Section 232 Pharmaceutical Tariffs Reach Every Remaining Company on September 29, 2026 — One Week Out

Proclamation 11020 imposed a 100 percent duty on patented pharmaceuticals and their ingredients. Annex III companies have paid since July 31. Everyone else begins at 12:01 a.m. eastern time next Tuesday.

Proclamation 11020, "Adjusting Imports of Pharmaceuticals and Pharmaceutical Ingredients Into the United States," published at 91 FR 18183 on April 9, 2026, imposed a 100 percent ad valorem duty on imports of patented pharmaceuticals and associated pharmaceutical ingredients identified in its Annex I. The proclamation set two effective dates. Companies listed in Annex III began paying on July 31, 2026. For every other company, the tariffs and tariff treatment take effect with respect to goods en

Proclamation 11020, "Adjusting Imports of Pharmaceuticals and Pharmaceutical Ingredients Into the United States," was published at 91 FR 18183 on April 9, 2026. It is a Section 232 action under 19 U.S.C. 1862, resting on the Secretary of Commerce's finding that pharmaceuticals and associated active pharmaceutical ingredients, including key starting materials, are being imported in such quantities and under such circumstances as to threaten to impair the national security of the United States.

Its second effective date arrives on September 29, 2026. Importers who have watched this proclamation from a distance because their suppliers were not on Annex III have one week of planning time left.

The two-track effective date

Clause (4) of the proclamation states that the tariffs and tariff treatment it imposes are effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on July 31, 2026 for the companies listed in Annex III, and on September 29, 2026 for other companies. The measures continue in effect unless expressly reduced, modified or terminated.

The phrase "entered for consumption, or withdrawn from warehouse for consumption" is the operative language, and it is worth reading precisely. It is the entry event that controls, not the date of purchase, the date of shipment, or the date of arrival. Merchandise already sitting in a bonded warehouse on September 29 becomes dutiable at the new rate when it is withdrawn, not when it was placed there.

What the 100 percent rate applies to

The proclamation imposes a 100 percent ad valorem duty on imports of patented pharmaceuticals and associated pharmaceutical ingredients as identified in Annex I, except as otherwise provided. Annex IV separately lists pharmaceutical products and ingredients that are subject to a Section 232 zero tariff at this time.

The distinction the proclamation draws throughout is between patented, typically branded products on one hand, and generics on the other. Clause (5) provides that generic pharmaceuticals and their associated ingredients are not subject to Section 232 tariffs at this time, and clause (11) extends that to biosimilar products and to purchases of generic pharmaceuticals and ingredients for the Strategic API Reserve.

That exclusion is explicitly provisional. The proclamation directs the Secretary, within one year of its date, to inform the President of any circumstances that might indicate a need to adjust imports of generic pharmaceuticals and their associated ingredients. April 2027 is therefore a date generic importers should have on their own calendars.

The reduced rates, and what they require

The proclamation creates two paths to a rate below 100 percent, and both are conditioned on commitments to the U.S. government rather than on the characteristics of the goods.

Clause 8 sets a 20 percent ad valorem rate for patented pharmaceuticals and associated ingredients produced by companies that have plans, approved by the Secretary, to onshore production of those products and ingredients. That 20 percent rate is scheduled to rise to 100 percent four years after the date of the proclamation — that is, in April 2030.

Clause 10 goes further, imposing no tariffs on imports of patented pharmaceuticals and associated ingredients produced by companies that have fully executed agreements, or are negotiating agreements, with the Secretary and the Secretary of Health and Human Services regarding most-favored-nation pricing and the onshoring of production and research and development.

The structural consequence for importers is unusual and should be stated plainly: the applicable duty rate depends on the identity and commitments of the producing company, not solely on the tariff classification of the article. Two chemically identical shipments can carry different rates because their producers stand in different relationships to the U.S. government.

Trade-deal commitments are built into the structure

Clause 9 records a determination that it is necessary to implement pharmaceutical-related commitments in existing trade deals with the European Union, Japan, the Republic of Korea, and Switzerland and Liechtenstein jointly, as well as a future pharmaceutical-related deal with the United Kingdom, on which the proclamation states the two governments had reached an agreement in principle as of December 1, 2025.

The proclamation also gives the Secretary, in consultation with the Trade Representative, authority to increase the tariff rates referenced in clause (3)(c) to address a foreign jurisdiction's failure to fulfill commitments under its agreement with the United States, with a Federal Register notice to follow any such increase. Rates in this program can move upward administratively, and importers should not treat the published figures as permanently fixed.

The findings behind the action

The proclamation's factual basis is worth understanding, because it indicates how durable the policy is likely to be. The Secretary found that the United States, despite being the world leader in research and development for innovative pharmaceuticals, is heavily reliant on imports in a way that threatens access to life-saving medications in the event of a supply chain disruption.

Two figures from the Food and Drug Administration are cited. As of 2025, approximately 53 percent of patented pharmaceutical products distributed domestically are produced outside the country. At the active pharmaceutical ingredient level the reliance is deeper: only 15 percent of patented APIs by volume are domestically produced for the United States market.

Those numbers describe a policy aimed at relocating manufacturing over years, not at raising revenue in a quarter. The rate structure — 100 percent baseline, 20 percent for approved onshoring plans rising to 100 percent in four years, zero for executed MFN pricing and onshoring agreements — is built to make the domestic investment the cheaper option over time.

What importers should do in the next week

First, determine whether each of your suppliers is on Annex III. If a supplier is, it has been paying since July 31 and your landed costs should already reflect that. If it is not, September 29 is the date your costs change.

Second, determine whether each product is within Annex I, within Annex IV's zero-tariff list, or outside the scope as a generic or biosimilar. This is a product-by-product exercise, and the patented-versus-generic line does not always track internal product categories cleanly, particularly for authorized generics and for ingredients supplied into both patented and generic manufacturing.

Third, ask each producing company directly whether it has an approved onshoring plan under clause 8 or an executed or in-negotiation agreement under clause 10. The answer determines your rate, you cannot derive it from the merchandise, and your supplier may not volunteer it.

Fourth, look hard at goods in bonded warehouses and foreign trade zones. Withdrawal timing now carries a 100 percentage point consequence for in-scope merchandise, and the entry planning questions that follow are genuinely consequential rather than clerical.

Fifth, get classification and valuation right before the rate applies, not after. At a 100 percent ad valorem rate, every dollar of declared value carries a dollar of duty, which makes ordinary valuation questions — assists, royalties, related-party pricing, post-importation adjustments — far more material than they were. A disciplined tariff classification position and a documented customs valuation methodology are the two controls that matter most here.

Sixth, review your contracts for who bears a tariff change of this magnitude. Agreements drafted before April 2026 frequently do not allocate this risk, and in the absence of an allocation it falls on the importer of record.

Why this deserves attention beyond the pharmaceutical sector

Proclamation 11020 is part of a broader Section 232 expansion during 2026 that has also reached metals and unmanned aircraft systems. The common design features are worth noting by any importer: rates tied to company-level commitments rather than product characteristics alone; staged effective dates that treat named companies differently from everyone else; and delegated authority to raise rates administratively when commitments are not met.

Importers who have built their compliance programs around classification and origin alone will find that framework insufficient. It now also requires knowing, and being able to document, the regulatory status of the company that produced the goods.

Trembach Law Firm advises importers on Section 232 exposure, classification, valuation and entry planning. For a review of how the September 29 effective date affects your shipments, call (818) 514-7680, reach our Southern California tariff practice, or consult our guide to tariffs, duties and classification.

Frequently Asked Questions

What happens on September 29, 2026?

Clause (4) of Proclamation 11020 makes the tariffs effective for goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on July 31, 2026 for companies listed in Annex III, and on September 29, 2026 for all other companies. The proclamation was published at 91 FR 18183 on April 9, 2026 as a Section 232 action under 19 U.S.C. 1862.

My goods are already in a bonded warehouse. Am I safe?

No. The operative language is "entered for consumption, or withdrawn from warehouse for consumption." It is the entry event that controls, not the date of purchase, shipment or arrival. Merchandise sitting in a bonded warehouse on September 29 becomes dutiable at the new rate when it is withdrawn, not when it was placed there.

Are generics covered?

Not at this time. The proclamation imposes a 100 percent ad valorem duty on patented pharmaceuticals and associated ingredients identified in Annex I. Clause (5) provides that generic pharmaceuticals and their associated ingredients are not subject at this time, and clause (11) extends that to biosimilars and to purchases for the Strategic API Reserve. That exclusion is explicitly provisional — the proclamation directs the Secretary, within one year, to report circumstances that might indicate a need to adjust generic imports, which puts April 2027 on the calendar.

How can a company pay less than 100 percent?

Through commitments to the U.S. government rather than through the characteristics of the goods. Clause 8 sets a 20 percent rate for products from companies with Secretary-approved plans to onshore production — a rate scheduled to rise to 100 percent four years after the proclamation, in April 2030. Clause 10 imposes no tariff on products from companies with fully executed, or actively negotiated, agreements with the Secretary and the Secretary of Health and Human Services on most-favored-nation pricing and onshoring of production and R&D.

So two identical shipments can carry different duty rates?

Yes, and it should be stated plainly: the applicable rate depends on the identity and commitments of the producing company, not solely on the tariff classification of the article. Two chemically identical shipments can carry different rates because their producers stand in different relationships to the U.S. government.

Can these rates change again?

Yes. Clause 9 records commitments in existing trade deals with the European Union, Japan, the Republic of Korea, and Switzerland and Liechtenstein jointly, plus a future UK deal. The proclamation also authorises the Secretary, in consultation with the Trade Representative, to increase the rates referenced in clause (3)(c) where a foreign jurisdiction fails to fulfil its commitments, with a Federal Register notice to follow. Published figures should not be treated as permanently fixed.

This article is provided for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship. Tariff treatment depends on the specific merchandise, producer and entry facts involved, and no particular outcome is guaranteed. Consult a qualified attorney about your own circumstances.

Contact Trembach Law Firm at (818) 514-7680 for a confidential consultation.

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