The U.S. tariff landscape has shifted dramatically in 2026, and healthcare is caught in the middle. From a landmark Supreme Court ruling to new duties on branded drugs, the policy environment has moved fast and shows no signs of settling.
Here is where things stand and what health system leaders should monitor:
1. Supreme Court ruling on emergency powers
On Feb. 20, the Supreme Court ruled 6-3 that President Donald Trump exceeded his authority by invoking tariffs under the International Emergency Economic Powers Act. The law permits presidents to regulate economic activities following the declaration of a national emergency.
The decision put more than $166 billion in collected tariff revenue at risk of refunds and marked the most significant legal check on the administration’s trade agenda to date, according to a May 11 CBS News report.
The administration launched a refund portal April 20 through which businesses can file claims for IEEPA duties already paid, according to CBS News. As of early May, U.S. Customs and Border Protection had accepted roughly 21% of refund requests through the Consolidated Administration and Processing of Entries tool, with about 3% already in the refund stage. The first payments are expected around May 11.
2. A new 10% global tariff
Within 24 hours of the Supreme Court ruling, President Trump imposed a 10% tariff on virtually all imports under Section 122 of the Trade Act of 1974, a separate legal authority that permits temporary duties of up to 15% for 150 days to address balance-of-payments problems. The tariff took effect Feb. 24 and was set to expire July 24. The president signaled on social media that the rate could be raised to 15%, but never formally did so, according to the Tax Foundation. The law had never been invoked before.
However, on May 7 the U.S. Court of International Trade struck down the Section 122 tariff in a 2-1 ruling, finding that the president’s proclamation exceeded his statutory authority. The court granted a permanent injunction for select plaintiffs and ordered refunds of duties already paid; the administration is expected to appeal.
3. 100% tariff on branded drugs
On April 2, the administration imposed a 100% tariff on imported patented pharmaceuticals and their active ingredients under Section 232 of the Trade Expansion Act of 1962. Section 232 allows the president to impose tariffs on imports found to threaten national security, based on an investigation conducted by the Commerce Department.
The department launched its probe into pharmaceutical imports in 2025, concluding that U.S. reliance on foreign drug manufacturing poses a national security risk. Unlike Section 122, tariffs imposed under Section 232 remain in effect indefinitely. The duties take effect July 31 for large companies and Sept. 29 for smaller ones.
But there are significant carve-outs. Drugmakers that have signed most-favored-nation pricing agreements with HHS and committed to domestic manufacturing face no tariff through January 2029. Companies that pledge to onshore production but have not completed deals face a 20% rate. Products from the European Union, Japan, South Korea and Switzerland face a 15% rate under separate trade agreements, and the U.K. faces a 10% rate.
Generic drugs, biosimilars and their ingredients are not subject to tariffs for now, though the administration said it will reassess in one year. Orphan drugs, cell and gene therapies, animal health products and other specialty categories are also exempt.
The move follows more than a year of escalation. The administration first announced a 100% tariff on branded drugs in September 2025, then delayed implementation to negotiate pricing deals with more than a dozen major drugmakers, including Pfizer and Novo Nordisk. Those deals have spurred billions in domestic manufacturing investment.
4. Two new investigations, and what comes next
The administration launched two Section 301 trade investigations in March, widely seen as the legal groundwork for replacing the expiring Section 122 tariff with more durable, targeted duties.
The first, initiated March 11, examines structural excess manufacturing capacity across 16 economies — including China, the EU, Japan and India — spanning more than 20 sectors. A public hearing was held May 5. The second, initiated March 12, targets 60 economies over alleged failures to enforce bans on goods produced with forced labor. That hearing was held April 28.
The current 10% Section 122 tariff expires July 24.The administration has signaled it aims to complete both investigations by that date, using Section 122 as a bridge to more durable tariff authority.
Meanwhile, separate Section 232 investigations into pharmaceuticals and medical devices, PPE and consumables remain open and could yield additional duties later in 2026. Healthcare groups including the AHA have already warned that tariffs stemming from those probes could disrupt care delivery and raise costs.
5. What’s at stake for health systems
Healthcare’s import exposure is substantial. Roughly 69% of U.S.-marketed devices are manufactured solely outside the country, and hospital mainstays — including gloves, gowns, syringes, imaging equipment — are all in the crosshairs. The AHA has warned that tariffs could disrupt access to essential supplies, including PPE, single-use instruments and anesthesia equipment, much of which is sourced from China.
The pharmaceutical supply chain is similarly exposed. Roughly 80% of active pharmaceutical ingredients used in U.S. generics are sourced from countries such as China and India, and 83 of the top 100 generic drugs have no domestic source for key ingredients. Capital projects face added cost pressure as well through steel and aluminum tariffs, which remain in effect under separate Section 232 authority and now cover more than 400 product categories.
Unlike branded pharma companies, which have struck pricing and manufacturing deals to reduce or avoid tariffs, medical devicemakers operate on thinner margins and are less likely to reshore. Industry groups have warned that tariff costs will flow downstream to hospitals, insurers and patients — and that pre-negotiated contracts make it difficult for providers to pass those costs along until the next budget cycle.
Health system supply chain and finance leaders are watching all these threads closely, and most are preparing for continued volatility regardless of what the final policy landscape looks like.
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