On April 2, U.S. President Donald Trump signed two executive orders in succession, invoking Section 232 of the Trade Expansion Act of 1962 to restructure the tariff system on imported steel, aluminum, copper and other metal products, and proposing an ad valorem tariff arrangement of up to 1,00% on some imported patented drugs and pharmaceutical ingredients. The main rationale for both policies is “national security”: on the one hand, the emphasis is on promoting local metal manufacturing, and on the other hand, tariffs are used to pressure pharmaceutical companies to commit to pricing and repatriation issues.
Highlights of tariff adjustments for metals
- The mode of taxation was changed from “by metal content” to “by full value of goods”, with a threshold of 15% metal content.
- Derivatives below the 15% threshold: exemption from 232 duties.
- Products above the 15% threshold: taxed at full value and no double taxation in principle for multi-metal products.
- Effective April 6, tiered tax rates were implemented:
- Maintain 50% tariffs on bulk steel, aluminum, copper and other metal products
- Downstream derivatives levy 25%
- Transitional tax rate of 15% applies to industrial and grid equipment until the end of 2027
- Products manufactured overseas but using U.S. domestic metals are only subject to 10%
- UK products enjoy 25%, 15% gradient discounts
- Russia's punitive tariffs on aluminum products still apply 2001 TP3T
At the same time, the policy introduces a transitional tax rate mechanism and removes the mechanism for applying for inclusion of some products in order to enhance implementation flexibility.
Taxable prices and tighter enforcement
The dutiable price has been changed to be accounted for on the basis of the actual price paid by the U.S. importer, and Customs will strengthen its review of underreporting of prices and other behaviors; copper products have been included in the scope of taxation for the first time, and the 232 tariffs may be levied on a stacked basis with other tariff arrangements, which will further raise the pressure on compliance and costs.
Tariffs on medicines: up to 1001 TP3T and differentiation of time of entry into force
The adjustment program for imported medicines proposes to impose 100% ad valorem tariffs on imported patented medicines and pharmaceutical ingredients for which there is no tariff agreement with the U.S. and for which the enterprises have not signed the “most-favored-nation-pricing” agreement; and at the same time explicitly exempts generic medicines, biosimilar medicines, and nuclear medicines, among other categories.
The timing of tariff entry into force is differentiated by firm size:
- Large pharmaceutical companies: effective 120 days after publication (~July 31, 2026)
- Smaller companies: deferred to 180 days after the effective date (approximately September 29, 2026)
In addition, the United States has set graded tariff rates for different cooperating parties and complying enterprises. For example: EU and other allies“ tariffs on imported drugs are capped at 151 TP3T; the UK has been granted a lower tariff arrangement due to increased R&D of new drugs; 201 TP3T tariffs may be applied to companies that only commit to local production in the US, and may be raised to 1001 TP3T for non-renewal of the commitment; and companies that have signed a pricing and production ”dual agreement" are entitled to zero tariffs. Extended through January 2029
Overall, the tariff reconfiguration reflects the U.S. policy direction of promoting industrial reflux and strengthening trade protection, but it may also have a direct impact on China, Southeast Asia and other export regions, pushing up the cost of global trade compliance and exacerbating the risk of future trade friction.
Author: Kim
Company Name: Xindashun International Logistics (Shenzhen) Co.
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