President Issues New Pharma Tariffs and Revises Metals Section 232 Measures
President Trump issued two significant proclamations under Section 232 impacting pharmaceutical imports and modifying existing tariffs on metals and derivative products. Below is a summary of the key provisions, timelines, and considerations for importers provided by Sidley Austin LLP.
We will continue to provide updates as new information is being released. If you have any questions, please contact our office.
Earlier today, President Trump signed two proclamations related to tariffs: one imposed new tariffs on imported pharmaceuticals and pharmaceutical ingredients pursuant to Section 232 of the Trade Expansion Act of 1962 (“the Pharma 232 Proclamation”); and the other modified the tariffs previously imposed on imported aluminum, steel and copper (and derivative articles thereof) pursuant to Section 232 (“the “Modified Metals 232 Proclamation”).
For your reference, copies of the proclamations, including the annexes, are attached:
- Metals Imports Proclamation
- Metals Imports Annexes
- Pharmaceuticals Imports Proclamation
- Pharmaceuticals Imports Annexes
At a high level, the Pharma 232 Proclamation imposes a 100% tariff on patented pharmaceuticals and associated ingredients, but exempts (fully or partially) wide swaths of the industry. For example, products of countries that have agreements with the United States will be subject to a tariff of 15% (Japan, the EU, Korea, Switzerland and Liechtenstein) or 10% (UK); companies that have negotiated an on-shoring agreement with the Department of Commerce will be subject to a 20% rate initially and that rate will jump to 100% in 2030; companies that have negotiated an agreement with Commerce and a most-favored-nation pricing agreement with the Department of Health & Human Services will be subject to a 0% rate until January 20, 2029; certain categories of products (e.g., orphan drugs, nuclear mediciines, PDTs, fertility treatments, cell and gene therapies; antibody drug conjugates; medical countermeasures related to chemical, biological, radiological, and nuclear threats, animal health pharmaceuticals) also appear to be eligible for 0% treatment if one of more conditions are satisfied.
Generics not subject to these tariffs at this time, but that will be reviewed in 1 year. U.S.-origin pharmaceuticals are not subject to these tariffs – and this is important given how the customs rules of origin for pharmaceuticals work. There are a lot of details in both the proclamation and in the annexes. We recommend reviewing them all.
Companies (and countries) that have not yet negotiated a lower rate, will have the opportunity to do so. The tariffs imposed by this proclamation are effective July 31, 2026 for companies listed in Annex III and September 29, 2026 for everyone else (this is probably to give companies extra time to obtain an agreement that provides for a lower rate).
As for the Modified Metals 232 Proclamation, it modified the tariffs with regard to so called “derivative articles” – i.e., articles that contain aluminum, steel or copper as a component. The proclamation removed certain derivative articles from the scope of the Section 232 tariffs. It also addressed an issue that has bedeviled importers – how to calculate the dutiable metal content when the imported article includes metal and non-metal components – by requiring the tariff to be applied to the entire value of the covered article, regardless of metal content.
The President also terminated the “inclusion process” which had allowed companies to request that Commerce add additional products to the list of articles subject to these tariffs and replaced it with an interagency process for inclusions. According to the White House, the proclamation “establishes clear rules” for determining the Section 232 tariffs for aluminum, steel and copper:
- Articles made entirely or almost entirely of aluminum, steel, or copper will pay a flat 50% on their full value — for example, steel coils and aluminum sheet.
- Derivative articles substantially made of steel, aluminum, or copper will pay a flat 25% on their full value.
- Certain metal-intensive industrial equipment and electrical grid equipment will pay 15% through 2027, to accelerate the massive industrial base buildout currently underway across the United States.
- Products made abroad but entirely with American steel, aluminum, and copper will be subject to lower tariffs of 10%.
- Products made of 15% or less steel, aluminum, or copper will no longer be subject to Section 232 metals tariffs.
The changes made by this proclamation are effective April 6, 2026.