U.S. Customs and Border Protection (CBP) has released vital instructions via CSMS # 69395344 outlining the implementation of Presidential Proclamation 11020. Effective immediately, new reporting requirements and Section 232 tariffs apply to specific imports of patented pharmaceuticals and related ingredients classified under Chapters 29 and 30 of the HTSUS.
Key Effective Dates & Timelines
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July 31, 2026: Additional duties take effect for companies listed in Annex III of the Proclamation. All importers of goods under the subject Chapter 29 and 30 HTSUS classifications must report an applicable Chapter 99 HTSUS classification.
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July 31, 2026 – September 28, 2026: Importers bringing in goods from all other companies (not listed in Annex III) must file using the zero-duty HTSUS heading 9903.04.61.
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September 29, 2026: Section 232 duties officially take effect for products from all other companies.
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Generic Pharmaceuticals: Generic drugs and their associated ingredients remain exempt from additional Section 232 duties.
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U.S. Origin: Pharmaceuticals originating in the United States are not subject to these tariffs.
Chapter 99 HTSUS Classification Breakdown
Importers, brokers, and filers must utilize the correct Chapter 99 headings (9903.04.60 through 9903.04.69) based on product origin, company listing, and specific program criteria:
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9903.04.60 (Annex III Companies): Applies to patented pharmaceutical articles from companies listed in Annex III.
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Duty Rate: 100% ad valorem (combined column one and Section 232 duty rate).
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9903.04.61 (All Other Companies – Interim): Applies to patented pharmaceutical articles from non-Annex III companies entered before September 29, 2026.
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Duty Rate: 0% additional ad valorem.
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9903.04.62 (Select Countries): Applies to products from Japan, EU member countries, South Korea, Switzerland, or Liechtenstein.
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Duty Rate: 15% ad valorem (combined column one and Section 232 duty rate).
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9903.04.63 (United Kingdom): Applies to patented pharmaceutical articles that are products of the UK.
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Duty Rate: 10% additional ad valorem.
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9903.04.64 (Qualifying Onshoring Plan): Applies to articles subject to a qualifying onshoring plan. (Note: The Commerce Department notes zero companies currently qualify).
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Duty Rate: 20% additional ad valorem (increases to 100% on April 2, 2030).
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9903.04.65 (Onshoring & MFN Pricing): Applies to companies with a qualifying onshoring plan agreement and an MFN pharmaceutical pricing agreement (Annex II list).
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Duty Rate: 0% additional ad valorem (Expires January 20, 2029).
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9903.04.66 (Specific Uses): Applies to drugs and pharmaceutical articles for designated special uses.
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Duty Rate: 0% additional ad valorem.
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9903.04.67 (Generics): Applies strictly to generic pharmaceutical articles.
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Duty Rate: 0% additional ad valorem.
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9903.04.68 (U.S. Active Ingredients): Applies to pharmaceutical products featuring an active pharmaceutical ingredient packaged in dosage form that is a product of the U.S.
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Duty Rate: 0% additional ad valorem.
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9903.04.69 (Non-Pharmaceutical Articles): Applies to Chapter 29 and 30 HTSUS classified items that are not pharmaceutical articles.
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Duty Rate: 0% additional ad valorem.
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Important Rule: If a product falls under more than one rate of duty according to the Proclamation, the lowest applicable rate shall apply.
Additional Regulatory Impacts
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Free Trade Agreements & Preferences: For articles under headings 9903.04.60–9903.04.68 eligible for special tariff treatment, Section 232 duties will be collected in addition to any special preference rates.
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Chapter 98 Entries: Goods entered under Chapter 98 remain subject to these rules. Chapter 99 provisions cannot be used to bypass or claim a lower/duty-free rate that conflicts with this guidance. Antidumping and countervailing duties continue to apply as normal.
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Drawback: Drawback is available for duties paid under Proclamation 11020.
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Foreign Trade Zones (FTZ): Non-exempt products admitted to a U.S. FTZ on or after the proclamation’s effective date must enter as “privileged foreign status” (19 CFR 146.41) and remain subject to applicable ad valorem rates upon entry for consumption.
