U.S. to Apply 0% Tariffs to Korean Rare Drugs and Other Products Starting Sept. 29

The United States will apply 0% tariffs to specialty medicines, including rare disease drugs and cell and gene therapies, produced in South Korea and other eligible jurisdictions.

According to the Federal Register on the 23rd (local time), the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued a notice defining the medicines eligible for a 0% tariff rate and setting out the approval process under Presidential Proclamation No. 11020. The measure takes effect at 12:01 a.m. on the 29th.

President Donald Trump previously issued Proclamation No. 11020 on April 2, imposing 100% tariffs on certain patented medicines and related ingredients. The tariffs apply to companies listed in Annex III starting July 31 and to all other companies starting Sept. 29.

The notice defines the specialty medicines that may qualify for 0% tariffs. These include medicines for which all approved or authorized indications are designated for the treatment of rare diseases, nuclear medicines, plasma-derived therapies, fertility treatments, cell and gene therapies, antibody-drug conjugates (ADCs), certain medical countermeasures and veterinary medicines.

A 0% tariff rate will apply if the products are produced in an eligible jurisdiction, including South Korea, or if the Department of Commerce determines that the imports meet an urgent U.S. health need. In addition to South Korea, eligible jurisdictions include the European Union (EU), Japan, India, Taiwan, the United Kingdom and Vietnam.

Companies seeking approval based on an urgent health need may submit product-specific requests to BIS on an ongoing basis starting on the 23rd. Requests must include company and product information, along with evidence explaining why the imports meet an urgent U.S. health need.

The notice also includes technical amendments to the Harmonized Tariff Schedule of the United States (HTSUS). It clarifies the definitions of medicines and generic medicines and adds a new tariff classification, 9903.04.70, applying a 0% tariff to eligible medicines and related ingredients used exclusively for noncommercial purposes, such as clinical trials and research and development.

Meanwhile, generic (biosimilar) medicines and related ingredients are not currently subject to pharmaceutical tariffs under Section 232 of the Trade Expansion Act.