If Britain is to avoid Trump’s tariffs, the NHS may have to pay the price

It was Jeremy Corbyn who – in a rare moment of prescience – revealed exactly how the health service would be ‘on the table’ during any trade deal with the US. Given the maelstrom over tariffs, will Keir Starmer be able to defend the NHS when he meets the new president, asks Sean O’Grady

It’s an open question as to exactly how brutal Donald Trump will be with the UK when he finally gets around to considering his tariff policy towards a valued ally.

His mum was Scottish, he adores the royal family, he’s restored the bust of Winston Churchill to the Oval Office, and he even gets on OK with Keir Starmer. But sentiment may not count for much.

As we all know, he’s already attacked America’s three largest trading partners, Canada, Mexico and China, and he’s signalled that he’ll be equally aggressive towards the European Union, going so far as to call the EU’s trade surplus with America “an atrocity”. For what it’s worth, he’s more emollient about us: “The UK is out of line but […] I think that one can be worked out.”

Let’s hope so, and that things can be worked out, but why look into the crystal ball when you can read the book? Or, more specifically, the leaked official documents from the last time the British and the Americans talked turkey on trade, back in 2019?

With a small effort of memory, you recall Jeremy Corbyn, of all people, at the general election that December brandishing a 451-page document containing minutes and “read-outs” of talks between US and UK officials, between July 2017 and July 2019, on a prospective post-Brexit US-UK free trade agreement – ie, during the first Trump presidency.

It was one of the great prizes to be seized after leaving the EU, though in the end the mission was aborted. It was one of the few bright moments in Labour’s dismal election campaign, but the public reaction to the revelations probably helped bury the putative deal, which was in any case overtaken by the Covid pandemic.

The context then was an optimistic search by prime ministers Theresa May and Boris Johnson for a new trade treaty; now it will be more a matter of Trump agreeing not to slap tariffs on British exports to the US in return for concessions on more access to British markets. But the substantial arguments will be the same, and given that the UK enjoys such a healthy overall trade surplus with the US – about £40bn, more than 1 per cent of our national income – Trump has the British over a barrel.

In particular, we learned then that the Americans would very much like the British to allow them to charge the NHS more for medicines, loosen the bans on chlorinated chickens, genetically modified grains and growth hormone-induced meats, and adopt a more American approach to food additives, such as artificial colourings and flavourings in processed foods.

These days they’d probably also ask the British to adopt US standards on artificial intelligence and fully autonomous, “self-driving” cars, of the kind Elon Musk’s Tesla has developed.

Needless to say most, if not all of this, is politically unacceptable. Even if Starmer wanted to, his party, reflecting the wider electorate, would surely forbid it.

We may be sure much of this will be on the agenda when Starmer meets Trump in the coming weeks.

Corbyn, with some predictable exaggeration, claimed that the NHS would be “on the table” in any trade deal, implying privatisation and the Americans moving in to run trusts (which some might think a good thing). The real danger was another one, also highlighted by Corbyn: an American demand for higher prices for drugs, something that would cost the NHS, and the British taxpayer, dear; billions of pounds a year in extra costs.

It’s actually something that Trump mentioned in a very recent post on social media, with some anger: “Why should the United States lose TRILLIONS OF DOLLARS IN SUBSIDIZING OTHER COUNTRIES, and why should these other countries pay a small fraction of the cost of what USA citizens pay for Drugs and Pharmaceuticals, as an example?”

The “why” is because the NHS enjoys oligopsonistic buying power, and can use the ready supply of alternative generic drugs as leverage in its negotiations with the big pharmaceutical groups, including the American ones, who have consistently tried to demand the right to “patent extension” to protect returns as “procedural fairness” (something Joe Biden was also resistant to). In 2019, Corbyn pointed to the example of Humira, a drug to ameliorate rheumatoid arthritis and Crohn’s disease – fairly common complaints: “It costs our NHS £1,409 a packet. In the US, the same packet costs £8,115. Get the difference: £1,409 in our NHS, £8,115 in the USA. One of the reasons for US drug prices being on average 250 per cent of those here is a patent regime rigged for the big pharmaceutical companies. Let’s be frank, the US is not going to negotiate to sell its own medicines for less.”

Corbyn was wrong on plenty of things, but there’s no reason to suppose that US Big Pharma and a sympathetic Trump will be any less insistent about such matters this time around; nor that such hikes would prove unaffordable for the NHS. Quite the opposite, in fact – and it is quite difficult to see how the UK can accept such a demand.

This will all leave any kind of US-UK trade agreement further away than ever, Brexit looking ever more foolish, and Britain losing even more opportunities for economic growth.

It feels very much like the great British goose – proudly free-range, organic and non-chlorinated – is cooked.