European stocks rose on Friday as oil prices fell back below $100 per barrel, while industry experts warned that the UK could lose its competitive advantage over the EU due to Donald Trump's latest round of tariffs. The market rally was led by energy and automotive sectors, though concerns over trade policy and corporate earnings weighed on sentiment.
Trump's Tariffs Shift UK-EU Trade Dynamics
In a move that surprised many analysts, the US announced new tariffs late Thursday targeting countries accused of engaging in forced labor. While the overall 10% tariff on British goods remained unchanged—matching the deal struck by Keir Starmer and Peter Mandelson—the EU's previous near-blanket 15% rate was reduced to 10%. Experts say this effectively nullifies the UK's prior advantage.
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“The UK’s tariff parity with the EU erodes the competitive edge we had,” said a trade analyst from the Confederation of British Industry. The UK government welcomed the deal, stating there was “no change” to headline rates or preferential terms in the car, pharmaceutical, and aerospace sectors under the economic prosperity deal (EPD).
UK Defense Contract Sparks Debate
Meanwhile, Unite union general secretary Sharon Graham called on Mayor Andy Burnham to award a £2.4bn military satellite contract to European manufacturer Airbus rather than US rival Lockheed Martin. She warned that choosing the US firm could put up to 600 UK jobs at risk. Airbus, though headquartered in France, designs and builds satellites in Stevenage and Portsmouth.
Volkswagen Profits Plunge Amid China Sales Slump
German carmaker Volkswagen reported a steep decline in profits and cut its revenue forecast as sales slumped in China—its largest market. VW now expects sales revenue to fall by up to 3% this year, reversing an earlier forecast for a 3% increase. The company is pushing through a brutal cost-cutting program that includes axing up to 100,000 jobs, double the previous target. The supervisory board rejected CEO Oliver Blume’s plan to shut four German factories earlier this month.
| Metric | Previous Forecast | Revised Forecast |
|---|---|---|
| Sales Revenue Change (2025) | +3% | -3% |
| Job Cuts Target | 50,000 | 100,000 |
| China Market Sales Trend | Stable | Slump |
Key Takeaways
- European stocks rise as oil falls below $100, but trade tensions persist.
- UK loses tariff advantage over EU under Trump's new forced-labor levies.
- Unite union urges award of £2.4bn satellite contract to Airbus to protect UK jobs.
- Volkswagen slashes revenue forecast and doubles job cuts to 100,000.
FAQ
What were the new US tariffs announced by Trump?
The US imposed tariffs on countries accused of forced labor, reducing the EU's rate from 15% to 10%, matching the UK's existing 10% tariff under the economic prosperity deal.
How does the tariff change affect UK businesses?
Industry experts warn that the UK no longer holds a tariff advantage over the EU, potentially harming competitiveness in sectors like automotive and aerospace.
Why is Volkswagen cutting 100,000 jobs?
Volkswagen is facing a steep sales slump in China and rising costs, prompting a restructuring plan that includes massive job cuts and a lowered revenue forecast for 2025.
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