WASHINGTON — President Donald Trump signed a proclamation Wednesday imposing tariffs of up to 100 percent on imported patented pharmaceuticals and active pharmaceutical ingredients, invoking national security authority under Section 232 of the Trade Expansion Act of 1962.
The order takes effect July 31, 2026 for companies listed in an annex to the proclamation and Sept. 29, 2026 for all others.
The administration cited heavy U.S. dependence on foreign drug manufacturing as the basis for the action. According to the Food and Drug Administration, approximately 53 percent of patented pharmaceutical products distributed domestically are produced outside the country, with only 15 percent of patented active pharmaceutical ingredients produced domestically by volume.
The tariff structure varies based on a company’s commitments to move production to the United States. Companies with approved onshoring plans will face a 20 percent rate, rising to 100 percent in four years. Companies that have also entered into most-favored-nation pharmaceutical pricing agreements with the Department of Health and Human Services will pay zero tariffs until Jan. 20, 2029. Companies with no onshoring plans face the full 100 percent rate.
Country-specific rates also apply. Products from Japan, the European Union, South Korea, and Switzerland and Liechtenstein will be subject to a 15 percent rate. Products from the United Kingdom will be taxed at 10 percent, with the potential to drop to zero under a pending trade agreement the two countries reached in principle as of December 2025.
Generic pharmaceuticals and biosimilars are exempt from the tariffs at this time. Also exempt are orphan drugs, nuclear medicines, plasma-derived therapies, fertility treatments, cell and gene therapies, antibody drug conjugates, and medical countermeasures related to chemical, biological, radiological and nuclear threats.
The proclamation directs the Secretary of Commerce and the Secretary of Health and Human Services to pursue negotiations with pharmaceutical companies on onshoring and pricing agreements and to report progress within 90 days.
The order does not affect imports of U.S.-origin pharmaceutical products.
