European stocks rose on Friday as oil prices fell back below $100 a barrel, but the rally was overshadowed by warnings that UK businesses could lose their competitive advantage against the EU due to Donald Trump’s latest round of tariffs. The new levies, announced late Thursday, reduce the EU’s near blanket tariff from 15% to 10%, matching the rate the UK secured in its economic prosperity deal with the US.
UK Tariff Disadvantage vs EU
Industry experts caution that the UK’s headline 10% tariff on goods—unchanged under the new measures—now offers no relative benefit over the EU’s reduced rate. UK businesses had previously enjoyed a 5% tariff advantage over the EU, but that gap has been erased.
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| Region | Previous US Tariff Rate | New US Tariff Rate | Change |
|---|---|---|---|
| European Union | 15% | 10% | -5% |
| United Kingdom | 10% | 10% | No change |
| China | Variable | Higher (targeted) | Increase |
The table shows that the EU now faces the same base tariff as the UK, eliminating the previous competitive edge for British exporters.
UK Labour Union Warns of Job Risks
Sharon Graham, general secretary of the Unite union, called on Mayor Andy Burnham to award a £2.4bn military satellite contract to European manufacturer Airbus instead of US rival Lockheed Martin. She warned that choosing the US company could put 600 UK jobs at risk at Airbus facilities in Stevenage and Portsmouth.
Volkswagen Profit Slump
Volkswagen reported a steep fall in profits and cut its revenue forecast, citing a sales slump in China. The German carmaker is pushing through a cost-cutting programme that includes up to 100,000 job cuts, double earlier estimates. VW now expects sales revenue to fall by up to 3% against a previous forecast of 3% growth.
Key Takeaways
- European stocks rose as oil fell below $100, but tariff concerns weigh on sentiment.
- UK loses tariff advantage over EU as both now face 10% US import duty.
- Unite union urges UK to award satellite contract to Airbus to protect 600 jobs.
- Volkswagen slashes profit forecast, plans 100,000 job cuts amid China slump.
- Trump’s tariffs target countries accused of forced labour, affecting global trade dynamics.
FAQ
What are Trump’s new tariffs and how do they affect UK vs EU trade?
Trump’s latest round of tariffs reduces the EU’s blanket rate from 15% to 10%, matching the UK’s existing 10% rate. This eliminates the UK’s previous 5% advantage, prompting warnings that UK businesses could lose competitiveness.
Why is Volkswagen cutting jobs and lowering its profit forecast?
Volkswagen is facing a steep sales decline in China, its largest market, due to intense competition. The carmaker is slashing costs, targeting up to 100,000 job cuts, and now expects revenue to fall by up to 3% this year.
What is the Unite union’s stance on the satellite contract?
Unite general secretary Sharon Graham argues that awarding the £2.4bn contract to US-based Lockheed Martin would put 600 UK aerospace jobs at risk. She urges Mayor Burnham to choose Airbus, which has UK design and manufacturing facilities.
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