Trump’s Trade Strategy, Tariffs, and the NHS: A Monopsony Under Pressure

The return of Trump-style economic nationalism to U.S. trade policy may again raise the prospect of deeper U.S.-UK trade ties, but with significant asymmetries of power. One central area of concern is the potential marketisation of the UK’s National Health Service (NHS). Despite the NHS's position as a monopsony — a dominant single buyer in the UK healthcare system — Trump’s use of tariffs, unilateral trade pressure, and corporate tax diplomacy could create conditions that pressure the UK government to expose parts of the NHS to private competition, particularly from U.S. pharmaceutical and insurance interests.

The NHS operates as a monopsony: it is the sole, dominant purchaser of healthcare services, drugs, and medical equipment within the UK. This gives it strong bargaining power, especially in price-setting for pharmaceuticals, where it can negotiate or reject high prices that are commonplace in U.S. healthcare.

In a hypothetical UK-U.S. trade deal, the U.S. might seek to undermine this monopsony power by demanding “equal market access” for U.S. healthcare firms — a standard provision in U.S. trade templates under the rubric of non-discrimination and liberalisation of services. For example, U.S. drug companies might demand that the UK remove or weaken NICE’s cost-effectiveness thresholds, which cap the NHS's willingness to pay for new drugs (usually around £20,000–£30,000 per Quality-Adjusted Life Year or QALY).

Trump’s tariff strategy is rooted in the use of trade barriers not just for protectionism, but as negotiating leverage. During his first presidency, Trump imposed Section 232 tariffs (under national security grounds) on steel and aluminium, including against allies. His approach saw trade as zero-sum, with bilateral surpluses and deficits used as justification for pressure.

In a future scenario, Trump could impose tariffs on UK car exports or agricultural goods to force concessions in healthcare. For instance, a 25% tariff on UK-made cars (as previously threatened against the EU) could create economic pressure that forces the UK government to "unlock" NHS procurement processes, or allow private American firms to tender contracts for NHS supply chains — including IT, diagnostics, and specialist services.

This could erode the NHS's monopsonistic position, replacing centrally planned health expenditure with a fragmented, pluralistic service procurement model that increases costs and reduces public accountability.

The UK’s Digital Services Tax (DST), introduced in 2020, imposes a 2% levy on the revenues of large digital firms, primarily targeting U.S. giants like Amazon, Google, and Facebook. While the DST was designed to ensure tech companies pay fair taxes in the jurisdictions they operate in, the Trump administration viewed it as discriminatory against American business and threatened retaliatory tariffs.

In a renewed Trump administration, similar retaliation could serve as an additional tool to pressure the UK into broader trade concessions. Trump could exploit public criticism of U.S. tax avoidance (which is genuine) to demand reciprocal concessions, arguing that U.S. firms are unfairly penalised unless they are allowed preferential access to new sectors, including healthcare.

This "quid pro quo" logic could frame the NHS as an opportunity zone for American capital in return for easing off on DST enforcement or other retaliatory measures.

Hypothetical Policy Dynamic: A Converging Pressure Point

Let’s imagine a scenario:

The UK resists dropping the DST or refuses to expand market access for U.S. drug firms.

In response, the U.S. slaps 25% tariffs on UK car exports and hints at restrictions on fintech services.

Simultaneously, pharmaceutical firms lobby Congress and the USTR to demand changes to UK drug pricing controls under a new trade framework.

Trump signals that a better deal could be reached if the UK "fairly compensates" U.S. firms through procurement liberalisation in public services — e.g., enabling U.S. insurers or private providers to bid on NHS contracts.

In this scenario, despite the NHS's monopsony power, the UK's macroeconomic dependency on U.S. trade post-Brexit — especially under a government seeking a growth agenda without raising domestic taxes — might lead to policy concessions that begin to erode the NHS’s universal, publicly funded model.

The NHS’s status as a monopsony buyer gives it inherent power over suppliers — but this power is vulnerable when confronted by an aggressive bilateralist trade strategy that targets politically sensitive sectors. Trump’s use of tariffs as bargaining instruments, and the DST as an entry point for negotiating "fairness" on behalf of American companies, could generate pressure for the UK to partially open the NHS to market forces. Such a shift — even if subtle or sector-specific — could mark the beginning of a more commodified, unequal healthcare system, imported through the mechanisms of international trade rather than public choice.