How UK exporters have been affected by Brexit and how they can survive

While the UK struck a last-minute deal with the EU just before the deadline to ensure tariff-free trade, changes to the borders have had a profoundly negative impact on British exports into Europe in the first three months following Brexit. However, British exporters can use this as an opportunity to grow in other markets and find success among new customers.

The Impact of Brexit on UK Exports to the EU

The effect of Brexit on British exporters was immediately apparent when figures early this year revealed that British exports to the EU had fallen by 40% during January 2021. This represented £5.6 billion worth of trade and was the biggest slump in the UK’s economy since the first wave of the COVID-19 pandemic, with the country’s GDP falling 2.9% from December. Some industries were hit harder than others, with food and live animal exports falling by 63.6% and the fish and shellfish segment falling by 83%. 

However, according to experts, the UK’s economic downturn and the significant reduction in exports to the union since Brexit are not a result of Brexit alone. While it is an important factor, the pandemic, along with large-scale stockpiling ahead of Brexit, also played a part. Worldwide lockdowns affected how goods moved across the world, and preparations for the post-Brexit disruption caused companies to stockpile in preparation, meaning fewer orders were made at the beginning of 2021.

Overall, the impact of Brexit may be less harsh on UK exporters than what many had predicted, although it may still significantly reduce the volume of exports entering the EU from the UK. Fortunately, British exporters can use this as an opportunity to grow in new markets.

Alternative Markets to Target

There was a slight rise (1.7%) in non-EU trade in January, which is an indication that UK exporters are beginning to see the value of exploring other markets, although they have yet to take full advantage.

In the years leading up to Brexit, UK exporters had already begun making this shift to focus on selling to non-EU countries, with exports to countries outside Europe growing by 13.7% from 2018 to 2019. 

To take full advantage of the opportunities presented by selling in other countries, UK exporters must first assess where demand for their product lies and conduct thorough market research to understand the nature of this demand, the consumer, and the competitive landscape. According to the Federation of Small Businesses, the US is the single most important country for British SMEs to trade within the coming years, along with 46% of small British exporters selecting the US as a priority market.

Whichever country British exporters find suitable to do business with, it is vital that they work out cultural differences, political sensitivities, and language barriers.  

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