TRADE POLICY | 2026-09-23

Six Days Before the Section 232 Pharmaceutical Deadline, Commerce Names the Nine Zero-Tariff Categories and Nineteen Eligible Jurisdictions

BIS defines orphan drugs, nuclear medicines, plasma therapies, cell and gene therapy and six more categories, lists the jurisdictions that qualify, opens an urgent-health-need application, and corrects six HTSUS provisions.

On September 23, 2026 the Bureau of Industry and Security published guidance implementing the zero-tariff carve-out in clause 3(d) of Proclamation 11020, Docket No. 260918-0006, RIN 0694-XC154, at 91 FR 60360. It does three things at once: it defines the nine categories of specialty pharmaceutical products that can receive a Section 232 ad valorem rate of zero, it names the nineteen jurisdictions whose products are eligible, and it opens an application process for products that meet an urgent U.

On September 23, 2026 the Bureau of Industry and Security, Office of Strategic Industries and Economic Security, published a notice titled "Guidance and Procedures for Implementing Tariff Adjustments for Specialty Pharmaceuticals and Associated Pharmaceutical Ingredients and Technical Corrections to the Harmonized Tariff Schedule of the United States for Duties Imposed Under Proclamation 11020." It carries Docket No. 260918-0006 and RIN 0694-XC154, and appears at 91 FR 60360.

The notice matters because of what happens six days after it published. Proclamation 11020, issued April 2, 2026 and published at 91 FR 18183, imposed a 100 percent ad valorem tariff on certain imports of patented pharmaceuticals and associated ingredients — effective July 31, 2026 for companies listed in its Annex III, and September 29, 2026 for all other companies. Until this notice, the carve-out in clause 3(d) named categories of specialty products without defining them and without saying which countries qualified. Importers could not tell whether they were inside it.

The nine categories, now defined

Clause 3(d) directed a zero ad valorem rate for a list of specialty pharmaceutical products. BIS states that it consulted the Food and Drug Administration and the U.S. Department of Agriculture Center for Veterinary Biologics to define them, and that the definitions exist solely for determining eligibility under Proclamation 11020 and are not binding guidance for any other purpose. The categories are:

Drugs where all approved or licensed indications are designated as orphan; nuclear medicines; plasma derived therapies; fertility drugs; cell therapy products; gene therapy products; antibody drug conjugates; medical countermeasures related to chemical, biological, radiological and nuclear threats; and pharmaceutical products for animal health. The Secretary may identify other specialty pharmaceutical products as well.

Two of the definitions are worth reading closely because they are narrower than the category names suggest.

An orphan drug qualifies only where all approved indications are for rare diseases or conditions. The definition ties to designation under Section 526 of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 360bb, with all approvals under Section 505 (21 U.S.C. 355) or licensure under Section 351 of the Public Health Service Act (42 U.S.C. 262) being for one or more such rare diseases. A product that carried an orphan designation but later added a non-orphan indication does not satisfy this.

Nuclear medicine is defined by reference to the existing regulatory definitions of "radioactive drug" at 21 CFR 310.3(n) and "radioactive biological product" at 21 CFR 600.3(ee), rather than by any new standard.

The notice also states that the definitions cover investigational drugs as well as FDA-approved or FDA-authorized drugs, and that Commerce reserves the right to modify them in future.

The nineteen eligible jurisdictions

Being in a listed category is not enough. Clause 3(d) conditions the zero rate on the Secretary determining, in consultation with the U.S. Trade Representative and the Secretary of Health and Human Services, either that the goods are products of a jurisdiction with a current or forthcoming trade and security framework agreement as referenced in Executive Order 14346, or that they meet an urgent U.S. health need.

The notice supplies the jurisdiction list: Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, India, Indonesia, Japan, Jordan, Malaysia, North Macedonia, the Republic of Korea, Switzerland and Liechtenstein, Taiwan, Thailand, the United Kingdom, and Vietnam. The notice adds that changes to this list may be published in a future notice.

For a California importer the practical test is now two-part and concrete: is the product within one of the nine defined categories, and is it a product of one of those nineteen jurisdictions? A qualifying product from a jurisdiction not on the list does not get the zero rate on the country pathway — it must go through the urgent health need route instead.

The urgent U.S. health need application

The second pathway is an application, and it opened the day the notice published. Submissions are received on an ongoing basis starting September 23, 2026, with no closing date, sent electronically to BIS.

Each application covers one specific product. BIS asks for organization information — full legal name and address, plus the name, title and contact details of the authorized representative — and then, for the product itself: the HTSUS classification at the 10-digit level where possible; the advertised name and brand or the Investigational New Drug Application number as applicable, together with the active ingredient or combination of active ingredients; the category being claimed from the nine; and the country of origin.

The one-product-per-application rule is the operational detail that catches companies out. An importer with a portfolio of qualifying products is filing a set of applications, not one, and the 10-digit classification request means each needs its classification settled before filing rather than after.

Six technical corrections, and why two of them matter broadly

The notice issues five technical corrections to Annex I of the Proclamation and one to Annex IV.

The first amends the definition of "generic pharmaceutical articles" in subdivision (c)(iii) with respect to HTSUS heading 9903.04.67, to specifically include unpatented animal health products.

The second creates a new Chapter 99 heading carrying an ad valorem rate of zero, for pharmaceutical products and associated ingredients imported under the HTSUS classifications listed in subpart (c) of U.S. note 40 that are solely intended for clinical trials, research and development, or other non-commercial applications. For California's biotech and research importers this is the most consequential line in the notice: material brought in for trials and R&D now has its own zero-rate heading rather than sitting ambiguously inside the commercial framework.

The third narrows the definition of "pharmaceutical articles" in subdivision (c)(i) to cover only finished pharmaceutical products, their active pharmaceutical ingredients, and the key starting materials of those APIs. The fourth correspondingly amends subdivision (i) with respect to heading 9903.04.69 to clarify that it covers any pharmaceutical or non-pharmaceutical articles under a listed classification that are not finished products, APIs, or key starting materials.

The fifth incorporates HTSUS changes made by the Committee for the Statistical Annotation of Tariff Schedules on July 1, 2026 — an interagency committee including the U.S. International Trade Commission, CBP and the Census Bureau. The Annex IV correction removes certain HTSUS codes that overlapped with Annex I.

What has not changed

Generic pharmaceutical products and their associated ingredients remain outside the Section 232 pharmaceutical tariffs at this time. Separately, companies with Commerce-approved onshoring agreements are subject to different rates under procedures BIS published in May 2026 for company-specific onshoring agreements.

Those two exclusions are doing a great deal of work in the current structure, and neither is permanent. Proclamation 11020 requires the Secretary to report to the President within one year on any circumstances indicating a need to adjust imports of generic pharmaceuticals, which puts April 2027 on the calendar for generic importers.

What to do before September 29

First, classify. Every determination in this framework runs through the HTSUS classification and through which subdivision of U.S. note 40 a product falls under. The third and fourth corrections turn on whether an article is a finished product, an API, a key starting material, or none of those — a tariff classification question before it is a tariff question.

Second, establish the producing company's status. Whether a shipment carries 100 percent, 20 percent under an approved onshoring plan, or zero depends on the producer's relationship with Commerce, not on the goods. Your supplier knows the answer and may not volunteer it.

Third, run the two-part specialty test — category and jurisdiction — and identify which products fail the jurisdiction test and therefore need an urgent-health-need application.

Fourth, look at material in bonded warehouses and foreign trade zones. The Proclamation operates on goods entered for consumption or withdrawn from warehouse for consumption, so the withdrawal date, not the arrival date, determines treatment.

Fifth, get valuation right. At a 100 percent ad valorem rate every dollar of declared value carries a dollar of duty, which makes ordinary customs valuation questions — assists, royalties, related-party pricing, post-importation adjustments — materially more consequential than they were at low rates.

The larger pattern

This notice is a good illustration of how the 2026 Section 232 programs actually work. Eligibility turns on company-level commitments and jurisdiction-level agreements as much as on the goods, the operative lists are published separately from the proclamation that created them, and they can change by notice. An importer whose compliance program tracks only classification and origin is missing the variables that now determine the rate.

Trembach Law Firm advises importers on Section 232 exposure, classification, valuation and entry planning. To review how the September 29 date and this guidance affect your products, call (818) 514-7680, consult our guide to tariffs, duties and classification, or contact our Southern California tariff practice.

Frequently Asked Questions

Which nine categories can receive a zero Section 232 rate?

Which jurisdictions are eligible?

Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, India, Indonesia, Japan, Jordan, Malaysia, North Macedonia, the Republic of Korea, Switzerland and Liechtenstein, Taiwan, Thailand, the United Kingdom, and Vietnam. The notice adds that changes to this list may be published in a future notice.

Is being in one of the nine categories enough on its own?

No. The test is two-part. The product must fall within one of the nine defined categories and be a product of one of the nineteen listed jurisdictions. A qualifying product from a jurisdiction not on the list does not get the zero rate on the country pathway and must instead go through the urgent U.S. health need application.

My drug has an orphan designation. Does it qualify?

Only if every approved indication is for a rare disease or condition. The definition ties to designation under Section 526 of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 360bb, with all approvals under Section 505 or licensure under Section 351 of the Public Health Service Act being for one or more such rare diseases. A product that carried an orphan designation but later added a non-orphan indication does not satisfy this.

What is the deadline I am working against?

Proclamation 11020 imposed a 100 percent ad valorem tariff on certain imports of patented pharmaceuticals and associated ingredients, effective July 31, 2026 for companies listed in its Annex III and September 29, 2026 for all other companies. This guidance published September 23, 2026 — six days before the second of those dates.

Do these definitions apply outside the tariff question?

No. BIS states it consulted the FDA and the USDA Center for Veterinary Biologics to write them, and that the definitions exist solely for determining eligibility under Proclamation 11020 and are not binding guidance for any other purpose. Commerce also reserves the right to modify them in future.

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, classification 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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