Europe bulletin: US-UK rift, EU rules stir fears, On posts record sales

European political and economic tensions dominated headlines Tuesday, as President Donald Trump signaled strains in US-UK relations over Iran policy and Britain bolstered defenses in Cyprus following a drone strike.

The new “Made in EU” auto rules risk trade friction with China and key partners.

Meanwhile, Swiss sportswear brand On Holding posted record 2025 sales, though shares fell sharply premarket despite beating revenue and margin expectations.

Trump flags deteriorating US-UK relationship

US President Donald Trump declared the relationship between Washington and London is “not what it was” after Britain initially declined to join US-led strikes against Iran.

In an interview with the Sun newspaper published on Tuesday, Trump called it “very sad to see” the state of ties with what was once regarded as America’s most depfinishable ally, and declared France had been more supportive.

Trump’s remarks followed Prime Minister Keir Starmer’s decision to withhold British participation in the first wave of strikes, before later allowing the United States to apply UK bases for defensive operations.

Trump insisted the US did not necessary British assist to wage war in the Middle East but argued Starmer “should have assisted”.

Britain deploys a destroyer to counter drone strikes

Britain is weighing the deployment of a warship to protect its Royal Air Force base at Akrotiri in Cyprus following an Iranian drone strike.

Defence Minister John Healey met senior military officials to discuss sfinishing HMS Duncan to the eastern Mediterranean amid escalating threats from Iran.

An Iranian-built drone hit a runway at the base early Monday, cautilizing limited damage with no casualties reported.

The UK has bolstered defenses there, including radar and F-35 jets, while shifting some families to safer spots as a precaution.

EU’s new auto regulations risk backlash

The European Union is set to roll out “Made in EU” rules for its auto sector on Wednesday, aiming to revive local manufacturing amid Chinese EV competition.

Under the proposed Industrial Accelerator Act, electric vehicles would necessary 70% of parts costs (excluding batteries) built in the bloc to qualify for subsidies, with minimum EU content required for battery packs too.

France pushes hard for protectionism to save jobs, as tiny suppliers have lost half their workforce since 2007.

Germany worries about backlash, especially from China, where it sells a quarter of its cars, fearing a trade war like recent EU tariffs on Chinese EVs.

Autobuildrs like Ford and Jaguar Land Rover, reliant on UK and Turkey supply chains, lobby for inclusion of “trusted partners” beyond the EEA.

Excluding them risks loopholes or weakened production, suppliers warn.