Tax Insight

US imposes new Section 232 tariffs on pharmaceuticals and revises tariffs on aluminum, steel, and copper

Insight
7 minute read
April 10, 2026

What happened?

President Trump issued two Section 232 Proclamations on April 2 imposing new tariffs on (i) patented pharmaceuticals and related ingredients and (ii) steel, aluminum, and copper articles and derivatives. Both actions are framed as national security measures aimed at reducing reliance on foreign supply chains and boosting US production.

The pharmaceutical action introduces a baseline 100% tariff on patented pharmaceuticals and associated pharmaceutical ingredients, with reduced or zero rates available for companies that enter into onshoring and/or Most Favored Nations (MFN) pricing agreements, or source from countries with whom the US has an agreed upon pharmaceutical agreement (i.e., Japan, South Korea, Switzerland, Liechtenstein, the United Kingdom, and member countries of the European Union), and currently excludes generics, biosimilars, and associated ingredients.

The actions taken with respect to metals redefine existing measures by applying generally 50% tariffs to many steel, aluminum, and copper articles and reducing the tariff rate for certain derivative goods to 25%, simultaneously creating new standards for tariff calculations and the value to which the tariffs apply.

Why is it relevant?

These measures significantly increase the cost of importing affected goods and introduce complex, variable tariff outcomes depending on product classification, origin, and participation in government programs. For pharmaceuticals, the policy directly targets high-value patented products, creating a strong incentive to onshore manufacturing and R&D or renegotiate pricing arrangements. For metals, the “full value” tariff application for certain derivatives and new “de minimis” rule increases exposure across industrial supply chains, not just raw materials. Multinational companies could see downstream impacts on customs valuation, transfer pricing, supply chain design, and effective tax rates.

Actions to consider

Companies should assess whether their products fall within the relevant Harmonized Tariff Schedule (HTS) classifications and annexes, and determine applicable tariff rates based on origin, product type, and eligibility for reduced-rate programs. Life sciences companies should evaluate whether onshoring strategies or MFN pricing agreements could mitigate tariff exposure, while metals importers should review bill-of-materials and production engineering options to identify opportunities for lower-duty treatment. Businesses also should consider modeling the financial and tax impact, including customs value, intercompany pricing, and contract terms, and consider supply chain restructuring where appropriate. Immediate attention should be given to import timing, existing inventory, and contractual tariff allocation given near-term effective dates.

For more details, read the full Tax Insight linked below.