What the July 2025 Executive Order Means for Pharmaceutical Shipments

New Tariff Rules Take Effect August 29, 2025—But Pharmaceuticals Remain Exempt (For Now)

On July 30, 2025, the White House issued a major Executive Order:

"Suspending Duty-Free De Minimis Treatment for All Countries."

Effective August 29, this policy ends the long-standing practice of allowing goods valued under $800 to enter the U.S. duty-free. For many sectors, this represents a significant shift in compliance and cost structure. Fortunately, as of today, pharmaceutical products remain exempt from these changes—though vigilance is needed as policies evolve.

https://www.whitehouse.gov/presidential-actions/2025/07/suspending-duty-free-de-minimis-treatment-for-all-countries/

What Changed Under the Executive Order

The de minimis provision allowed low-value imports to bypass formal customs processes and enter the U.S. without duties. The new rules replace that with fixed duties based on the country's IEEPA tariff rate:

• Under 16%: $80 per item

• 16%–25%: $160 per item

• Over 25%: $200 per item

This change impacts a wide range of goods—including electronics, apparel, accessories, and toys—but pharmaceuticals are (currently) excluded.

Where Pharmaceuticals Stand Today

Protected by the WTO Pharma Agreement

The 1994 WTO Agreement on Trade in Pharmaceutical Products eliminates tariffs on a defined list of pharmaceutical products and active ingredients. This agreement remains in force and continues to be a pillar of U.S. trade policy.

https://www.wto.org/english/tratop_e/pharma_ag_e/pharma_agreement_e.htm

Covered Under Chapter 30 of the Harmonized Tariff Schedule (HTSUS)

The Harmonized Tariff Schedule of the United States (HTSUS) governs duty rates across all product categories. It is updated regularly and publicly available through the U.S. International Trade Commission.

As of HTS Revision 19 (August 2025), HTS Chapter 30, which covers:

• Human-use pharmaceuticals (HTS codes beginning with 3002–3006)

• Active ingredients and compounds

• Diagnostic kits and biologicals

…still lists these items as "Free" of duty.

https://hts.usitc.gov/

However, the HTS is subject to change at any time based on policy, international agreements, or enforcement actions. Importers should regularly review the latest versions and classifications to ensure compliance.

What Is Not Covered: Proceed with Caution

• Medical devices (HTS Chapter 90)

• Vitamins and dietary supplements (HTS Chapter 21)

• Wellness or cosmetic products

• Products with mixed or unclear classification

These adjacent categories may not be eligible for tariff exemptions and should be reviewed individually.

What the End of De Minimis Means for Shippers

Products that previously entered the U.S. under informal de minimis clearance will now require formal entry, which includes:

• A full commercial invoice with the HTS code

• Declaration of country of origin

• Customs bond (in some cases)

• Use of a licensed customs broker or freight forwarder

• Longer clearance times

• Higher shipping and handling fees from couriers

Failure to adapt to these changes could result in delays, inspections, or unexpected charges.

Country of Origin Matters

Duties are calculated based on the declared country of origin, not the country from which the product was shipped. Even if a pharmaceutical is warehoused in Canada or the EU, sourcing raw materials from China or India could affect its duty classification or scrutiny level.

National Security Investigations: A Watch Point

Pharmaceuticals are currently excluded from the Executive Order due to their inclusion in a Section 232 national security investigation.

• Public comment period closed: May 7, 2025

• Final report due: December 27, 2025

• Outcome: May determine whether pharmaceuticals remain exempt in 2026 and beyond

https://www.federalregister.gov/documents/2025/04/16/2025-06587/notice-of-request-for-public-comments-on-section-232-national-security-investigation-of-imports-of

What to Watch Next

Timeline	Event
August 29, 2025	Executive Order takes effect
December 27, 2025	Section 232 report on pharma imports due
2026+	Possible changes based on election-year policies

Future regulatory decisions could alter the current pharmaceutical exemptions. Staying proactive is essential.