The US Administration has decided not to impose ad valorem tariffs on certain specialized medicines and their components imported into the US from India and 19 other countries. This information was published in a notice from the US Department of Commerce.
This decision comes against the backdrop of Washington's plans to introduce a 100% tariff on some patented pharmaceutical imports and related ingredients starting September 29.
According to the US Department of Commerce notice, an ad valorem (value-based) tax will not be imposed on a range of specific medications and their components imported from India and 19 other nations. A zero percent tariff will apply to products used to treat serious diseases, infertility, cell therapy, gene therapy, antibody-drug conjugates, and veterinary drugs. Components used in the production of these specialized medicines are also covered by this tax exemption.
According to the World Customs Organization, an ad valorem tariff is a tax levied as a certain percentage of the goods' value. The Department of Commerce clarified that products meeting the criteria on the list may receive a zero tariff due to existing or future trade and security agreements with the US.
The Department of Commerce emphasized that this support is provided only to countries that have a trade and security agreement with America. In addition to India, this list includes Argentina, Bangladesh, Cambodia, Ecuador, Salvador, the European Union, Guatemala, Indonesia, Japan, Jordan, Malaysia, North Macedonia, South Korea, Switzerland, Liechtenstein, Taiwan, Thailand, the United Kingdom, and Vietnam.
It should be noted that on April 2, President Donald Trump issued an executive order imposing tariffs on imports of patented pharmaceuticals, biological agents, and related ingredients into the US as part of efforts to support domestic production. This decision was part of the implementation of an order issued under Section 232 of the Trade Expansion Act. Initially, a 100% tariff was set on certain patented pharmaceuticals and ingredients. It came into effect for companies listed in the appendix on July 31, and for other relevant companies on September 29.
The Department of Commerce also clarified that generic pharmaceutical products and their components are not subject to the pharmaceutical tariff introduced under Section 232. Technical adjustments were made to the original order, including changing the definition of generic pharmaceutical products to include non-patented health veterinary products, and clarifying that pharmaceutical products include only finished preparations, their active pharmaceutical ingredients, and basic raw materials for such ingredients.