EUR News
LAST UPDATE: June 2, 2025
Lutnick Downplays Impact of Tariff Court Ruling on US, EU Talks
U.S. Commerce Secretary Howard Lutnick minimized concerns about the impact of a recent court ruling on tariffs during ongoing negotiations with the European Union. He emphasized that talks were ongoing and that the ruling had only briefly paused discussions.
Insight
The court ruling, which temporarily blocked many of President Trump’s tariffs, introduces legal uncertainty into U.S. trade policy. While the administration downplays its impact, the European Union may perceive this as an opportunity to leverage negotiations in their favor. The situation underscores the complexities of trade negotiations amid shifting legal and political landscapes. The outcome of these talks will have significant implications for transatlantic trade relations and global economic stability.
Trade War, Labour Costs Herald Weakest UK Outlook Since 2022, CBI Says
UK businesses are facing their bleakest outlook since September 2022, according to a recent Confederation of British Industry (CBI) survey. Private sector firms expect a significant drop in output over the next three months, driven by rising National Insurance costs, a nearly 7% increase in the National Living Wage, and uncertainty from U.S. tariffs under President Donald Trump.
Insight
The combination of increased labor costs and global trade tensions is exerting significant pressure on UK businesses. The anticipated decline in output reflects concerns over profitability and competitiveness, particularly in labor-intensive industries. The government’s fiscal policies, including higher social security contributions, further strain business operations. Addressing these challenges requires a balanced approach that supports economic growth while ensuring fair labor practices. The situation highlights the interconnectedness of domestic policies and international trade dynamics in shaping economic outlooks.
UK Factories Struggle as Trade Uncertainty, Higher Costs Hit, PMI Shows
In May 2025, the UK manufacturing sector experienced a continued downturn, although the decline was less severe than initially projected. The S&P Global UK Manufacturing PMI rose to 46.4 from April’s 45.4, marking the highest level since February but still below the growth threshold of 50.
Insight
The persistent contraction in the UK manufacturing sector reflects ongoing challenges, including trade uncertainties and rising operational costs. The slight improvement in the PMI suggests a potential stabilization, but the sector remains under pressure from reduced demand and export orders. The impact of increased employment costs, due to tax hikes and wage increases, further complicates recovery efforts. Manufacturers’ cautious optimism indicates a hope for improved conditions, but sustained growth will depend on resolving trade issues and enhancing domestic and international demand.
Pro-Trump Nationalist Wins Poland’s Presidential Election
Karol Nawrocki, a conservative nationalist backed by Donald Trump and Poland’s Law and Justice (PiS) party, narrowly won the presidential election with 50.89% of the vote, defeating liberal Warsaw Mayor Rafał Trzaskowski.
Insight
Nawrocki’s victory signals a shift towards nationalist policies in Poland, potentially straining relations with the European Union. His alignment with Trump and skepticism towards EU integration may lead to legislative gridlock, especially as he holds veto power over reforms proposed by the pro-EU government. This outcome reflects a broader trend of rising right-wing populism in Europe and could influence Poland’s foreign policy, particularly regarding Ukraine and NATO. The election results underscore the deep political polarization within the country.
EU to Continue Good Cooperation with Poland After Nawrocki Win, von der Leyen Says
European Commission President Ursula von der Leyen congratulated Karol Nawrocki on his presidential victory, expressing confidence in continued cooperation with Poland despite potential policy divergences.
Insight
Von der Leyen’s statement aims to maintain diplomatic relations and stability within the EU, even as Poland’s new leadership may pursue more nationalist and Eurosceptic policies. The EU’s willingness to engage suggests an attempt to keep Poland aligned with EU values and prevent further fragmentation. However, the effectiveness of this approach will depend on Nawrocki’s domestic agenda and his administration’s openness to collaboration. The situation highlights the EU’s challenges in balancing unity with member states’ divergent political directions.
NEWSMAKER – Who is Poland’s Next President Karol Nawrocki?
Karol Nawrocki, a 42-year-old conservative historian and former head of the Institute of National Remembrance, is Poland’s newly elected president. Known for his nationalist views and emphasis on traditional values, he has limited political experience but strong backing from the PiS party and Donald Trump.
Insight
Nawrocki’s background suggests a presidency focused on national identity, historical narratives, and conservative social policies. His leadership may prioritize Polish sovereignty and skepticism towards EU influence, potentially impacting judicial reforms and minority rights. His stance on Ukraine, supporting aid but opposing NATO membership, indicates a nuanced foreign policy approach. Nawrocki’s presidency could reshape Poland’s domestic and international trajectory, emphasizing traditionalism and national interests over liberal democratic norms.
Polish Manufacturing Sector Contracts Sharply in May, PMI Shows
Poland’s manufacturing Purchasing Managers’ Index (PMI) fell to 47.1 in May from 50.2 in April, indicating the steepest monthly decline since June 2022. The contraction was driven by a significant drop in new orders, affecting output, purchasing, and employment.
Insight
The sharp decline in manufacturing activity reflects underlying economic challenges, including reduced domestic and foreign demand. Factors such as rising labor costs, global trade uncertainties, and potential policy shifts under the new administration may exacerbate the sector’s struggles. The downturn could influence monetary policy decisions, with expectations of interest rate adjustments to stimulate growth. The manufacturing sector’s performance will be a critical indicator of Poland’s economic resilience amid political transitions.
Swiss Economic Output Increases as Firms Rush to Beat US Tariffs
Switzerland’s economy grew by 0.8% in Q1 2025, surpassing expectations, as companies accelerated exports to the US ahead of impending tariffs announced by President Trump. Exports to the US rose by 17.4%, significantly boosting overall economic performance.
Insight
The surge in exports highlights the impact of trade policies on economic behavior, with businesses front-loading shipments to avoid higher costs. While this strategy provided a short-term economic boost, it may lead to future volatility as demand stabilizes post-tariff implementation. The situation underscores the interconnectedness of global trade and the importance of predictable policies. Swiss authorities may need to navigate the challenges of maintaining export competitiveness amid shifting international trade dynamics.
Turkish Manufacturing Sector Contracts in May as Demand Weakens
Turkey’s manufacturing sector contracted in May 2025, with the PMI falling to 47.8 from 49.3 in April, indicating a decline in demand and output.
Insight
The contraction reflects ongoing challenges in Turkey’s manufacturing sector, including weakened domestic and foreign demand. The decline in new orders and production suggests that economic uncertainties and potential external factors, such as global trade tensions, are impacting the sector. The continued contraction may prompt policymakers to consider measures to stimulate demand and support manufacturers.
