A big news has come out regarding the American tariff. The US No ad valorem (value based) tariff will be imposed on certain drugs and their related ingredients imported from 20 countries including India. These drugs are used in the treatment of rare diseases. This information has been given in a notice issued by the US Commerce Department.
The US Commerce Department has published in the Federal Register a list of countries that will have zero tariff facilities for these specialty drugs. Apart from India, the list includes Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, European Union, Guatemala, Indonesia, Japan, Jordan, Malaysia, North Macedonia, South Korea, Switzerland, Liechtenstein, Taiwan, Thailand, Britain and Vietnam.
Ready to impose 100 percent tariff
Eligible products from these locations may be subject to zero percent tariffs because they have current or future trade and security framework agreements with the US, the notice said. According to the World Customs Organization, an ‘ad valorem’ tariff is a fixed percentage of the monetary value of taxable goods. The move comes at a time when Washington is preparing to impose 100 percent tariffs on some patent pharmaceutical imports and their related ingredients from September 29.
The US President announced
US President Donald Trump on April 2 issued a manifesto aimed at promoting domestic manufacturing. Under this, provision was made under Section 232 of the Trade Expansion Act to impose customs duty up to 100% on patent medicines, biologics and their related ingredients.
Relief to India
For some companies this tax has already been implemented from 31st July and for other companies it is being implemented from 29th September. But according to a recent list published in the Federal Register, important medical formulations imported from major partner countries like India have been completely excluded from this 100 percent tax.
Which drugs will not be taxed?
According to a notification issued by the US administration, the zero percent tariff rate will be applicable on products that are used in the treatment of serious diseases such as infertility treatment, cell therapy, gene therapy, antibody-drug conjugates and animal drugs. Key ingredients used in the manufacture of these specialty drugs are also included in the ambit of this tariff exemption.
