UK Exports to the EU Fall to the Lowest Recorded Level as Imports Rise
Although UK goods exports to the European Union (EU) have decreased significantly since Brexit, the union continues to be the UK's largest trading partner. Come read our blog to learn more.
UK goods exports to the European Union (EU) have drastically reduced following Brexit. Figures released early in 2022 by the Office of National Statistics (ONS) revealed that the UK is sending £20 billion less in exports to the EU in comparison with the last period of stable trade with Europe. Experts believe that this drop-off in trade is partly due to Brexit and the Covid-19 pandemic.
Brexit Exacerbates COVID-19 Trading Losses
Brexit and the pandemic combined resulted in a 12% reduction in exports from the UK to the EU compared with 2018 levels, while UK exports to the rest of the world only fell by half this figure (6%, representing around £10 billion). This data highlights how exiting the EU single market caused additional damage to UK exporters.
Some UK exporters were hit worse than others, with clothing exports suffering a 60% drop, followed by vegetable exports, which fell by 40%, and car exports, which fell by 25%. As a result, the UK car industry has slowed the production of vehicles, with around 100,000 fewer vehicles produced in the first three months of 2022 compared with 2021.
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The EU Remains the UK’s Largest Trading Partner
The EU still accounted for 42% of all UK exports in 2021, meaning that it retained its position as the UK’s largest trading partner. However, for the first time since 1997, when comparable records began, the UK is now importing more from the rest of the world than from the union.
While some see it as a positive sign that the EU is still the UK’s biggest trading partner, other experts warn that the increased border restrictions and red tape that have encouraged the drop in exports to the EU have permanently increased costs and extended delivery times. It is feared that Brexit may have undermined the UK’s competitiveness in the union.
While we are yet to see what the long-term impact of Brexit may be on UK exports, it is predicted that the EU will become a less important trading partner as UK exporters branch out and attempt to take advantage of emerging trade relationships. The EU has struck a number of important trade agreements recently, with Japan, New Zealand, and Australia. In the future, we may see more UK exports destined for these nations.
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