The US has imposed tariffs on European imports, including British goods, prompting questions about economic influence. At the same time, domestic data shows a slight economic rebound, while tech giants are consolidating power. Read on to understand how it could affect you.
🇺🇸 Trump’s Tariff Move
The US will impose 10% tariffs on imports from eight European countries, including the UK, starting 1 February, rising to 25% on 1 June unless a deal is reached for the “complete and total purchase of Greenland” by the United States.
President Trump has framed the move as a national security issue, arguing that foreign influence in the Arctic poses strategic risks. The tariffs use trade policy as leverage in a broader geopolitical dispute, a pattern that has appeared repeatedly under his administration. European leaders have condemned the plan, emphasising Greenland’s sovereignty and warning that the measures could strain long-standing economic ties.
What makes this move notable is the signal it sends to its supposed allies. The UK has spent recent years rebuilding trade relationships under the assumption that major economies were moving towards openness. A unilateral tariff cuts against that direction and reintroduces uncertainty for firms reliant on the US market. It comes after an already turbulent year for trade which saw significant disruption to businesses and markets.
For US firms, the risk is that if tariffs persist or escalate, they become a drag on growth while pushing up prices through higher import costs and disrupted supply chains. For exporting countries, demand weakens, and hiring and investment often follow, ultimately filtering through to the public.
The practical effects will vary by sector. UK exporters of vehicles, machinery and specialised manufacturing goods are likely to feel pressure first, particularly where competition is intense and margins are thin. Tariffs rarely stop trade entirely, but they cause friction. Orders can be delayed, alternative suppliers tested and investment plans revised.
Retaliation is likely, with the EU already considering €93 billion in counter-tariffs on US goods. If this aggressive approach from President Trump continues, it could slow global growth significantly. For the UK, renewed exposure to trade friction, alongside continued strains in the “special relationship”, comes at an already fragile point in the economic cycle, threatening their already weak GDP recovery.
🇬🇧 UK growth rebounds, but momentum remains fragile
November’s 0.3 percent rise in UK GDP looks encouraging because it followed a 0.1% decline in October. Why the pick up? And can the improvement carry forward into the new year?
The rebound was driven largely by services, particularly business-facing sectors such as professional services, consultancy and information technology which grew by 1.5%. These areas benefited from firms restarting delayed projects and higher demand for digital and technical work as companies adapted to tighter cost control rather than expanding capacity. In other words, much of the strength reflects adjustment and catch-up rather than a broad surge in demand. Manufacturing also rose sharply, by 2.1%, with transport equipment output rising as car production normalised after disruption earlier in the year. That recovery flatters the headline figure without necessarily signalling stronger underlying demand.
Where the data continues to disappoint is construction. A 1.3% decline in November extended a run of weakness driven by high interest rates, stalled housing transactions and delayed commercial projects. Construction is linked to future growth and fewer projects today mean less capital formation tomorrow, with the effects tend to show up with a lag.
November’s growth tells a story of resilience rather than renewal. The economy is proving capable of bouncing back from shocks, but the drivers are narrow and vulnerable to fading. Without a sustained recovery in investment and construction, monthly gains risk being temporary rather than transformative.
📲 Apple and Google Agree AI Deal
The multi-year partnership between Apple and Google centres on integrating Google’s Gemini artificial intelligence models into Apple’s ecosystem, including future versions of iOS. While Apple has developed its own AI capabilities, it has chosen to rely on Google for advanced large language model functionality rather than building everything internally.
For Apple, the logic is control without exposure. It keeps ownership of hardware, software and user relationships while outsourcing a complex and capital-intensive layer of AI development. For Google, the prize is distribution. Embedding Gemini across hundreds of millions of Apple devices secures access that no standalone AI firm can replicate.
This shift has consequences for OpenAI and other model developers. Technical leadership alone is no longer enough. Without default access to devices or platforms, even highly capable systems risk being marginalised. Control over distribution is becoming as important as model quality.
Market power in the sector is therefore concentrating further around firms that already dominate operating systems, cloud infrastructure and data. Investors tend to reward this dynamic because it reinforces barriers to entry and stabilises long-term cash flows. For users, the effects are mixed. Integrated AI services are likely to feel seamless and useful, but choice narrows as defaults become harder to avoid and alternatives harder to access.
💼 Unpacked
Tariffs as Leverage
Tariffs are sometimes used not to protect industries, but how they are being used now is to pressure other countries into political concessions. Tariffs raise costs for businesses that trade internationally, so the US hopes to use this threat to secure a deal around Greenland.
MoM vs QoQ vs YoY
Month-on-month shows short-term momentum, quarter-on-quarter smooths volatility, and year-on-year highlights longer-term trends. A single strong monthly figure can look impressive, but it does not always signal a lasting change in economic direction.
Market Concentration
Market concentration occurs when a small number of firms control a large share of an industry. High concentration can boost efficiency and profits, but it can also reduce competition, limit consumer choice and increase the economic influence of dominant players.
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Sources:
FT
Featured Image: President Trump meeting European Commission President Ursula von per Leyen, Wikimedia Commons
