In Case You Missed It: Europe Responds to Trump’s Tariffs; UK Workers Say No to Back to Office Mandates and Why the EU Might Have to Soften Its AI Legislation

31st March 2025

Welcome to ICYMI – a weekly snapshot of European news stories that have given me pause for thought. ICYMI is a chance for you to go beyond the front-page headlines and find out what other stories may be worthy of your attention. This week:

  • How Trump’s tariffs might hit European tech investment
  • The growing pressure on EU and UK legislators to appease US tech companies
  • Why the UK public sector needs help to integrate AI into its systems

It is Trump’s big gamble. ‘Liberation Day,’ April 2nd, will see the US President act on his long-held belief that tariffs can recreate a golden age of US wealth and independence. Yet as many media outlets are suggesting the economy, and the personal finances of millions of Americans could be at risk.

The shift to tariffs has also created an air of uncertainty in Europe with both US and European tech companies worried as to what the US administration might do next.

The biggest worry in Europe concerns the 25% tariff on imported vehicles. It is sure to hit Germany, the largest European car exporter to the US, the hardest, but as Euronews points out other countries notably the United Kingdom, Sweden, and Italy could also experience adverse effects, particularly in their supply chains for key components.

The German auto industry has also been a significant investor in many of that nation’s tech startups and there are fears investment might dry as companies double down on core products and services. 

Tech companies pressure UK/EU on tax and AI legislation 

While the EU is expecting tariffs, the UK is still hoping to avoid them and indeed secure a trade agreement. Its carrot to the US administration might be to replace the Digital Service Tax, which is currently levied on US companies like Amazon and X and raises not far off £1 billion per year.

There was no mention of the tax in the UK labour government’s spring statement last week and chancellor Rachel Reeves has insisted that Britain “won’t be pressured” into scrapping it. Yet as CityAM points out there is a growing belief that the tech companies will make repealing the tax central to any upcoming trade negotiations. 

Across the channel the lawmakers who helped shape the European Union’s landmark AI Act are worried that the bloc is considering watering down aspects of the AI rules in the face of lobbying from US technology companies and pressure from the Trump administration. 

Fortune reports that the EU’s AI Act which was approved just over a year ago, and outlines rules for general-purpose AI models like OpenAI’s GPT-4o might be softened before it comes into effect in August. This is because the European Commission has tasked its new AI Office with preparing a code of practice for the big AI companies, spelling out how exactly they will need to comply with the legislation. 

Leading American AI vendors have amped up their lobbying against parts of the EU AI Act recently, and the lawmakers are also concerned that the Commission may be looking to curry favour with the Trump administration, which has already made it clear it sees the AI Act as anti-innovation and anti-American. 

In other news Computer Weekly reports that the UK’s Public Accounts Committee (PAC) has raised concerns that outdated IT infrastructure, poor-quality data, and a shortage of digital skills are impeding the government’s plans to enhance public sector productivity through artificial intelligence (AI). Approximately 30% of central government IT systems are considered obsolete, with over 20 critical systems lacking funding for necessary upgrades.  

Employees still enthusiastic about hybrid working 

Finally The Guardian has the latest on the ongoing battle some employees are waging against their bosses who insist on a return to office. It has the details of a report from recruitment company Hays which has found that almost half of professionals would consider quitting if their employer forced them back to the office on a full-time basis. 

While overall 48% of workers surveyed said they would consider handing in their notice over the requirement for full-time office attendance, female workers would be more likely to do this (58%) compared with men (42%). 

Hybrid working, with time spend split between the office and another location such as home, is the working pattern for more than three-quarters (77%) of the workforce, according to the 8,000-plus UK organisations and professionals across a range of sectors who were surveyed. 

8887In Case You Missed It: Europe Responds to Trump’s Tariffs; UK Workers Say No to Back to Office Mandates and Why the EU Might Have to Soften Its AI Legislation
About the author

Zoë Clark is a Senior Partner and Head of Media and Influence at Tyto. She has led PR at RBS and Qlik, and worked with global brands including Barclays, Mastercard and SAS.

Category: Insights