Tariff Tensions and Healthcare Strains: Economic Risks in an Unbalanced System

Northern Trust’s July 2025 Weekly Economic Commentary explores the renewed escalation in U.S. trade policy and its intersection with persistent inefficiencies in the American healthcare system.

• Tariff escalation returns: The reactivation of sector-specific levies—50% on copper and 200% on pharmaceuticals—poses inflationary risks and supply disruptions for critical industries.

• Healthcare cost surge ahead: Proposed tariffs on active ingredients could raise U.S. drug prices by 13%, exacerbating already unsustainable healthcare spending projected to exceed 20% of GDP.

• Policy uncertainty prevails: Limited progress on trade negotiations and shrinking Medicaid funding further destabilize economic and social outcomes.

How resilient are portfolios to persistent cost shocks across trade and healthcare? The full report offers insights into the structural frictions shaping forward-looking risk assessments.