Shadow Chancellor Signals Targeted Budget Measures Amidst China Trade Tensions & NHS Drug Costs
LONDON - Shadow Chancellor Rachel Reeves has indicated plans for “targeted action” within the upcoming Budget,responding to escalating global economic pressures including trade disputes with China and concerns over pharmaceutical investment in the UK. Reeves emphasized that national security would be the priority in navigating relations with China, stating: “Our national security always comes first.”
The announcement follows China’s recent move to tighten export controls on rare earths and other materials vital for advanced technology manufacturing, prompting a threat from US President donald Trump of a 100% tariff on Chinese imports and raising fears of a full-scale trade war. US Treasury Secretary Scott Bessent labelled China’s actions “economic coercion” and “a global supply chain power grab.”
Reeves expressed “very concerned” about China’s actions, urging the Chinese government “not to put up barriers and restrict access,” while acknowledging the importance of accessing Chinese markets for sectors like financial services. She added, “I believe there are areas where we must challenge China, but there are also important opportunities to sell into Chinese markets… We’ve got to get that balance right.” Reeves also confirmed collaboration with G7 counterparts to develop a “critical minerals strategy” to reduce reliance on single sources.
Separately, Reeves acknowledged potential increases in the price of medicines procured by the NHS as a outcome of ongoing negotiations with the Trump administration and pharmaceutical companies, linked to potential tariff reductions and investment incentives. Several major drug companies have recently paused or cancelled UK projects, citing low pricing as a factor. Science Minister Patrick Vallance stated last month that NHS drug prices would need to rise to prevent further pharmaceutical investment from leaving the UK.
“We have seen as of the pricing regime, that clinical trials, new drugs have not been offered in the UK in the way that they are in other European countries,” Reeves told the BBC. “We want to make sure that people getting treatment from the NHS are able to access the best life-saving drugs in the world. And so we are looking at all of that, and… looking to secure more investment into Britain.”
