Pharmaceutical Tariffs: 2026 Rates, Exemptions, and Compliance

Pharmaceutical tariffs changed sharply in 2026. A presidential proclamation issued April 2, 2026 imposed a default duty of 100% on patented pharmaceutical products and their active ingredients, with lower rates available to companies that qualify under specific country, pricing, or manufacturing conditions.¹ Generic drugs and biosimilars are not covered. If you import branded drugs or their ingredients, the numbers on your entries are about to look very different.

The 2026 Proclamation: Rates and Effective Dates

The 100% ad valorem duty is the default rate for any covered product from any country not named in a preferential tier. It takes effect on two dates depending on the importer:

Generic pharmaceuticals, biosimilars, and their ingredients are not subject to the proclamation. Orphan drugs, animal health products, and certain other specialty pharmaceuticals are also exempt when they come from trade deal countries or meet an urgent public health need.² A separate Section 232 national security investigation into pharmaceutical imports, opened in April 2025, is still open and could add further measures.³

How to Qualify for a Lower Rate

Three pathways bring the rate below 100%:

Trade deal country origin. Products from the European Union, Japan, South Korea, and Switzerland/Liechtenstein face a 15% tariff. Products from the United Kingdom face 10%, subject to a bilateral pharmaceutical pricing agreement.²
Onshoring agreement. Companies that commit to an approved plan to move manufacturing to the United States pay 20%. That rate rises to 100% on April 2, 2030.¹
Most-favored-nation pricing plus onshoring. Companies that both enter an MFN pricing agreement with the Department of Health and Human Services and commit to an onshoring plan with the Department of Commerce pay 0% through January 20, 2029.²

Countries with no preferential tier, including China and India, sit at the 100% default unless an individual company negotiates its own arrangement.

What Still Governs Generics and Older Duty-Free Treatment

The WTO’s 1994 Agreement on Trade in Pharmaceutical Products, often called the Pharma Agreement, eliminated customs duties among participating countries on finished pharmaceutical products and more than 7,000 active ingredients and chemical intermediates used in pharmaceutical supply chains.⁴ Because the 2026 proclamation carves out generics, this framework continues to govern duty-free treatment for many products. For patented drugs, the new tariffs override that prior status in practice.

The Pharmaceutical Appendix to the Harmonized Tariff Schedule is the other main source of duty-free treatment. It lists thousands of substances by their International Non-proprietary Names, and products matched to a listed entry enter duty-free under General Note 13. The appendix uses Chemical Abstracts Service registry numbers as unique identifiers, so a claim depends on the product’s CAS number matching a listed number.⁵ A compound that looks dutiable under its general chemical classification may be duty-free once matched to the appendix, so check it before assuming a rate.

Getting the Classification Right

Every pharmaceutical entering the United States gets a ten-digit code under the Harmonized Tariff Schedule. Chapter 30 covers pharmaceutical products, including bandages and dressings prepared for retail sale, vaccines and blood fractions, and medicaments packaged for therapeutic use.⁶ The rate that applies to a shipment depends on the code assigned to it.

The system draws a sharp line between active pharmaceutical ingredients in bulk and finished dosage forms. A bulk shipment of a compound often falls under a different subheading than that same compound measured and packaged as tablets, and duty rates, exemptions, and regulatory requirements differ between the two.

Penalties for Misclassification

Federal law sets three tiers of civil penalties based on the importer’s level of fault:

Negligence: up to the lesser of the product’s domestic value or two times the lost duties.⁷
Gross negligence: up to the lesser of the domestic value or four times the lost duties.⁷
Fraud: up to the full domestic value of the merchandise.⁷

Voluntary disclosure before customs opens a formal investigation reduces the exposure sharply. A fraudulent violation disclosed early caps at 100% of the lost duties instead of the full domestic value; negligent errors caught by prior disclosure carry an even lower cap.⁷

Section 301 Duties: A Separate Live Risk

Section 301 of the Trade Act of 1974 gives the U.S. Trade Representative authority to impose duties on goods from countries whose trade practices are found to burden U.S. commerce.⁸ It has been the main tool for tariffs on Chinese goods since 2018. In May 2024, USTR extended most of the original tariffs and raised rates on categories including medical products by an additional 25% to 100%.⁹ In June 2026, USTR proposed new Section 301 tariffs targeting 59 countries and the European Union, with exemptions for certain pharmaceutical goods.¹⁰

Watch the Section 301 lists closely. Adding a specific compound or component can raise landed cost overnight. Product-specific exclusions are sometimes available, but the filing windows are short and the approval criteria are demanding. Goods with unpaid Section 301 duties are denied entry.

FDA Requirements Still Apply

Paying the duty is not enough. FDA can detain or refuse a pharmaceutical shipment at the border no matter what has been paid to customs.

Import data is filed electronically through the Automated Commercial Environment/International Trade Data System, the single portal linking CBP, the FDA, and other agencies. Entry filers must include the relevant Affirmations of Compliance codes on each submission.¹¹ Foreign drug manufacturers must also register their establishments with the FDA and list every drug they manufacture for commercial distribution in the United States, and they must update their listing data twice a year, in June and December. Shipments from unregistered facilities are subject to detention.¹²

Legal Ways to Reduce or Defer Duty

With patented-drug rates now reaching 100%, two established mechanisms deserve a look.

Foreign Trade Zones

A Foreign Trade Zone is a designated area inside the United States where imported goods can be stored, manufactured, or processed without paying customs duties on entry. Duties become due only when goods leave the zone for U.S. commerce, and the importer can elect to pay the rate that applies to either the imported raw materials or the finished product, whichever is lower.¹³ That flexibility matters when raw pharmaceutical ingredients carry a higher rate than the finished drug. FTZ operators avoid duty on manufacturing scrap and yield loss and can file a single weekly customs entry instead of one per shipment.

Bonded Warehouses

A bonded warehouse lets an importer store dutiable merchandise for up to five years without paying duties.¹⁴ Duties come due when goods are withdrawn for domestic consumption. If the goods are re-exported or destroyed under customs supervision, the duty liability is canceled.¹⁵ Bonded storage is useful while tariff terms are still shifting, for product bound for re-export to other markets, and for shipments waiting on FDA approval.

Customs Bonds Under the New Rates

Any commercial import valued over $2,500, or any import subject to another agency’s requirements such as FDA’s, needs a customs bond before entry.¹⁶ Pharmaceutical imports almost always hit both thresholds. There are two types:

Single entry bond, covering one shipment. The bond amount must be at least equal to the entered value plus duties, taxes, and fees.¹⁷
Continuous bond, covering all shipments over 12 months. The amount is typically 10% of the duties, taxes, and fees paid in the prior 12 months, with a $100 minimum.¹⁷

For regular pharmaceutical importers, a continuous bond usually wins on cost and administrative burden. Because the new tariff rates can roughly double the duty exposure on a patented-drug entry, bond amounts will rise with them. Companies that have not reviewed their bond levels since the April 2, 2026 proclamation should do so before July 31, when the new rates start hitting large-company shipments.

1
The White House. Adjusting Imports of Pharmaceuticals and Pharmaceutical Ingredients Into the United States
2
The White House. Fact Sheet – President Donald J. Trump Bolsters National Security and Strengthens U.S. Supply Chains by Imposing Tariffs on Patented Pharmaceutical Products
3
Congress.gov. Presidential 2025 Tariff Actions – Timeline and Status
4
World Trade Organization. The WTO’s Pharma Agreement
5
United States International Trade Commission. Pharmaceutical Appendix to the Harmonized Tariff Schedule
6
United States International Trade Commission. Harmonized Tariff Schedule of the United States – Chapter 30
7
Office of the Law Revision Counsel. 19 USC 1592 – Penalties for Fraud, Gross Negligence, and Negligence
8
Office of the Law Revision Counsel. 19 USC 2411 – Actions by United States Trade Representative
9
Congress.gov. Section 301 and China – The U.S.-China Phase One Trade Deal
10
United States Trade Representative. USTR Initiates Section 301 Investigations Relating to Structural Excess Capacity and Production in Manufacturing Sectors
11
U.S. Food and Drug Administration. Automated Commercial Environment/International Trade Data System (ACE/ITDS)
12
U.S. Food and Drug Administration. Electronic Drug Registration and Listing System (eDRLS)
13
U.S. Customs and Border Protection. Foreign Trade Zone Locations
14
U.S. Customs and Border Protection. What Is a Customs Bonded Warehouse?
15
Office of the Law Revision Counsel. 19 USC 1555 – Bonded Warehouses
16
U.S. Customs and Border Protection. When Is a Customs Bond Required
17
U.S. Customs and Border Protection. Bonds – How Are Continuous and Single Entry Bond Amounts Determined?