In this article British brand Gola, that is renowned for its silver trainers, take an in-depth look at the UK’s imports and exports, from the items we sell the most of to what we’re buying in, as well as which countries are our top import and export locations.
One of the main concerns of the economy right now is wondering just how Brexit will impact the UK’s trade? It’s the question burning in every businessperson’s mind, and it doesn’t seem to be getting an answer any time soon. According to the Independent, many companies are struggling to decide on importing and exporting in light of confusion over the direction Brexit will take businesses.
It’s a confusing topic for many, so before starting, lets discuss some of the key related phrases that will be mentioned throughout:
- Import and export — an easy one to start with, imports are items and goods we buy into the country. Exports are items and goods we sell to other countries.
- Trade deficit and trade surplus — these two terms come under the umbrella of the balance of trade. It is essentially the difference between monetary value of a country’s exports and imports. If a country is importing more goods than it is exporting, then the country has a trade deficit. A trade surplus occurs if a country is exporting more than it is importing. Generally, a trade deficit is considered concerning as it is seen as the country being unable to produce enough goods to supply its people, requiring them to import more.
- “Special relationship” — The oft-cited “special relationship” with the US boils down to our trade relationship. In 2016, the UK exported £100 billion worth of goods and services to the US, running a trade surplus with the US of £34 billion.
- Single market — The European Single Market is a single market that guarantees the free movement of goods, services, capital, and labour within the EU.
- Customs Union — A customs union is where a group of states or countries agree to charge the same import duties to each other.
When considering the EU as a whole with the same trade laws etc, rather than 27 separate countries, the EU imports more from the UK than the US by far. However, it is important to note that, regarding the “special relationship” with the US, the UK does export more to the US than any other country.
But what exactly is it that we’re exporting?
It has been reported that in 2016 the UK’s top export item was cars, which accounted for 12% of the overall $374 billion export value that year. One of example of this is the world renowned brand Mercedes-Benz, which offer a variety of cars, including the all new smart car.
Other popular UK products were gas turbines (3.5%), packaged medicaments (5.2%), gold (4.0%), crude petroleum (3.4%), and hard liquor (2.1%).
We also export a fair amount of food and drink, with items such as whisky and salmon popular abroad.
We must highlight that in this digital age, it’s easier than ever to offer services as exports too, and the UK does just that, via financial services, IT services, tourism, and more.
Where does the UK export too?
In 2016, our top export destinations were:
- United States (14%)
- Germany (9.5%)
- The Netherlands (6.0%)
- France (6.0%)
- Switzerland (5.1%)
China, one of the countries the UK is eyeing up for a potential trade deal after Brexit, accounted for 5%. Again, it is worth considering that Europe as a whole accounted for 55% of our top export destinations.
What is it that we are importing?
We are importing rather similar items as we’re exporting. Top imports into the UK in 2016 included gold (8.2%), packaged medicaments (3.1%), cars (7.8%) and vehicle parts (2.5%).
What are the top 5 countries that we are importing from?
For 2016, the top origins of the UK’s imported products were:
- Germany (14%)
- China (9.8%)
- United States (7.5%)
- The Netherlands (7.3%)
- France (5.8%)
This highlights that we import more from the EU than we sell to the EU. In 2017, we exported £274 billion worth to the EU, and imported £341 billion’s worth from the EU. In fact, the only countries in the EU that bought more from us than we bought from them were Ireland, Sweden, Denmark, and Malta. Our biggest trade deficit is to Germany, who sold us £26 billion more than we sold to them.
As previously mentioned, we have a trade surplus with the United States, as well as with Africa.
The UK also has a trade deficit with Asia, having sold £20 billion less in goods and services than we bought in.
A trade deficit is generally viewed in a poor light, as it is basically another form of debt: the UK imported $88.4 billion from Germany in 2016. Germany imported $35.5 billion from the UK, making a difference of $52.9 billion owed by the UK to Germany.
With uncertainty abound about the impact of Brexit on imports and exports, it remains to be seen how UK businesses will continue to trade abroad, and if focuses will shift.