This afternoon, the U.S. Department of Commerce (Commerce) released notice of an investigation under Section 232 of the Trade Expansion Act of 1962 into the effect of imported pharmaceuticals, pharmaceutical ingredients, and their derivative products on U.S. national security. Commerce's notice states that the investigation has been ongoing since April 1, 2025, and provides the public with a narrow window to provide comments—ending on May 7, 2025. This investigation may result in the imposition of tariffs, quotas, or other remedies on the subject products.
Broad Investigation; Narrow Window for Public Comments
The scope of this investigation is broad, encompassing "both finished generic and non-generic drug products, medical countermeasures, critical inputs such as active pharmaceutical ingredients and key starting materials, and derivative products of those items." Commerce's notice does not include a requirement that the subject products actually be used in pharmaceutical production. Thus, for example, chemicals that may be (but are not always) used as pharmaceutical ingredients could be considered.
Similar to other recent Section 232 investigation announcements, Commerce has identified topics to guide commenters, including:
- Current and projected U.S. demand;
- U.S. production capacity and the feasibility of increasing U.S. capacity;
- The role of foreign supply chains, particularly of major exporters, in meeting U.S. demand;
- The concentration of U.S. imports from a small number of suppliers and the associated risks;
- The impact of foreign government subsidies and predatory trade practices on U.S. pharmaceutical industry competitiveness;
- The economic impact of suppressed prices due to unfair foreign trade practices and state-sponsored overproduction;
- The potential for export restrictions by foreign nations, including the ability of foreign nations to weaponize their control over pharmaceutical supplies; and
- The impact of current trade policies on domestic production, and whether additional measures, including tariffs or quotas, are necessary to protect national security.
Interested parties may also address any other factors that they consider relevant to the assessing the impact of imported pharmaceuticals, pharmaceutical Ingredients, and derivative products on U.S. national security. In particular, commenters might consider addressing the scope or structure of a potential remedy. For example, recent Section 232 tariffs on automobile parts are framed as "appl{ying} to parts of passenger vehicles...and light trucks classifiable in" certain enumerated HTSUS subheadings, a formulation that focuses first and foremost on the article's status as an automobile part.
Cassidy Levy Kent can assist with preparing and filing comments for consideration in the Section 232 investigation.
What Comes Next
The statute provides Commerce 270 days, to conclude this investigation and transmit a report to the President, but Commerce may move faster should it wish to do so. Thereafter, the President has up to 90 days to determine whether imported pharmaceuticals, pharmaceutical Ingredients, and their derivative products threaten to impair U.S. national security and determine a response, as well as a further 15 days to implement any such action. Again, however, the President may determine to move more quickly. As for what remedy may ultimately result, Section 232 actions under the second Trump Administration have thus far resulted in 25% tariffs for on steel and steel derivative products, aluminum and aluminum derivative products, and automobiles and automobile parts. The President has suggested a similar level of tariff, or higher, is under consideration for pharmaceuticals, pharmaceutical Ingredients, and their derivative products.
Preparing Your Supply Chains
Cassidy Levy Kent's attorneys, economists, compliance experts, and licensed customs brokers are ready to help companies sort through the latest changes and develop strategic responses. Cassidy Levy Kent has extensive experience counseling clients to plan compliant supply chains that manage tariff risks. Our team's deep familiarity with trade law and policy enables clients to adapt and stay ahead of the curve.
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