ExecutiveOrdersEO
Proc 11020ProclamationTrump 47 · R

Proclamation 11020

Adjusting Imports of Pharmaceuticals and Pharmaceutical Ingredients Into the United States

This proclamation imposes a 100 percent ad valorem tariff on patented pharmaceuticals and active pharmaceutical ingredients (APIs) under Section 232 of the Trade Expansion Act of 1962, with reduced rates for companies that commit to onshoring production (20 percent, rising to 100 percent in 2030) and for certain trade partners. It directs the Secretaries of Commerce and Health and Human Services to negotiate agreements addressing national security concerns, establishes criteria for onshoring plans, and exempts generic pharmaceuticals, biosimilars, and certain specialty products from the tariffs.

Federal Register Open PDF 91 FR 18183

Impact dates

  1. In 40d

    Tariffs effective for other companies

  2. Secretary to report on need for action on generic pharmaceuticals and ingredients

  3. Zero tariff rate expires for companies with MFN pricing agreements

  4. 20% onshoring rate increases to 100%

  5. 20d ago

    Tariffs effective for companies listed in Annex III

  6. 50d ago

    Secretary and HHS Secretary update President on negotiation progress

Market exposure

Policy exposure mapping — not investment advice. Illustrative public companies are incomplete and not recommendations.

Sectors

PharmaChemicals

Mechanisms

TariffSubsidy / incentiveProcurementLicensing

Role pressure

  • AdverseImporter — 100% tariff on patented pharmaceuticals and APIs significantly increases cost of imported drugs; tiered rates create compliance burden
  • ProtectiveDomestic producer — Preferential 20% rate and path to zero tariff for onshoring incentivizes domestic manufacturing investment; explicit goal of self-sufficient domestic base
  • MixedDownstream manufacturer — Generic manufacturers exempted and protected; patented drug makers face cost pressures unless they onshore; API sourcing disrupted
  • MixedTrading-partner exporter — EU/Japan/Korea/Switzerland face 15% rate; UK faces 10% with potential zero; others face 100% unless company-specific agreements reached

Geographies

USEUJPKRCHLIUKINCN

Exposure dates

  • — Tariffs effective for companies listed in Annex III
  • — Tariffs effective for other companies
  • — Zero tariff rate expires for companies with MFN pricing agreements
  • — 20% onshoring rate increases to 100%

Illustrative public companies

Curated watchlist matches by sector/role — incomplete; not a recommendation.

MMM3MALBAlbemarleBASFYBASFCTVACortevaDOWDowDDDuPontLLYEli LillyJNJJohnson & JohnsonLYBLyondellBasellMRKMerckNVSNovartisPFEPfizerSQMSQM

Confidence: high · Policy alerts

Key directives

  • Impose 100% ad valorem duty on patented pharmaceuticals and APIs listed in Annex I
  • Direct Secretary of Commerce and HHS Secretary to negotiate agreements under 19 U.S.C. 1862(c)(3)(A)(i)
  • Establish 20% rate for companies with approved onshoring plans, increasing to 100% on April 2, 2030
  • Set 15% rate for EU, Japan, South Korea, Switzerland/Liechtenstein; 10% for UK with potential reduction to zero
  • Grant zero tariff for companies with MFN pricing agreements until January 20, 2029
  • Exempt generic pharmaceuticals and biosimilars from Section 232 tariffs at this time
  • Establish onshoring plan criteria via Federal Register
  • Require periodic progress reports from companies with onshoring plans, with potential external audit
  • Authorize retroactive tariff reimposition for fraud or misleading commitments
  • Direct CBP to administer tariffs and require importer information

Who is ordered

Timeline

Immediate

  • Proclamation issued; negotiations directed to begin
  • Secretary and HHS Secretary to update President on negotiations within 90 days

Near term (90d)

  • Negotiation progress report due to President by July 1, 2026
  • Tariffs effective July 31, 2026 for companies in Annex III
  • Secretary to establish onshoring plan criteria via Federal Register notice

Long term

  • Tariffs effective September 29, 2026 for other companies
  • 20 percent onshoring rate increases to 100 percent on April 2, 2030
  • Zero tariff for MFN pricing agreement companies expires January 20, 2029
  • Secretary to report on generic pharmaceuticals within 1 year (April 2, 2027)

Risks & tensions

  • Potential for significant drug price increases for consumers and healthcare systems from 100% tariffs
  • Complex multi-tiered tariff structure (100%/20%/15%/10%/0%) creates compliance and enforcement challenges
  • Retroactive tariff authority for fraud creates legal uncertainty for importers
  • Tension between onshoring goals and immediate access to life-saving medications
  • 180-day negotiation window under Section 232(c)(3)(A)(i) may trigger additional unilateral action if agreements fail
  • Exemption for generics may create perverse incentives for product classification disputes
  • UK rate contingent on future agreement creates policy uncertainty
Proclamation 11020: Adjusting Imports of Pharmaceuticals and Pharmaceutical Ingredients Into the United States · Executive Orders