4 ways in which Brexit has impacted UK trade

How Brexit has affected UK trade

Here are some of the most significant ways in which Brexit has impacted trade between the UK and the rest of the world. 

Trade outside of the EU

While the UK was in the single market, the majority of its trade was with countries that were also in the EU. The Conservative politicians that engineered Brexit promised that new trade routes and relationships would be developed with countries that were not in the EU. Although these relationships have yet to be perfectly realized by any means, they have partially emerged. The UK now makes more trade with the United States, the People’s Republic of China, and Australia than it does with its European neighbors. 

According to the Office For Budget Responsibility, new trade deals with non-EU countries have not quite made up for the trade lost due to Brexit. This does not mean that they will never do so. Trade with the rest of the world depends on broader geopolitical circumstances than Brexit alone. Trade with countries outside of the UK is unlikely to ever be as easy as it was with European nations when the UK was part of the Union.

Border regulations

While some heralded Brexit as a way of shaking off some of the draconian regulations necessitated in the Union, importers and haulers are now subjected to more regulations as a result of the referendum. Because the UK is no longer a single market member, goods coming in and out of the country must be subjected to customs laws. This has led to huge tailbacks of trucks at ports like Dover and Calais – where much of the physical trade between the UK and continental Europe transits. 

Fuel prices

Brexit  – alongside the War in Ukraine and Covid-19 – has had a big impact on the ever-fluctuating price of petrol and diesel. While the exit from the single European market has provided the UK with a degree of financial freedom, it has not given it freedom from the will of the European market. Instead, it has increased the costs experienced by fuel retailers when moving their products. 

Fuel card sites like iCompario have benefitted from a new wave of logistics companies seeking ways to cut through the huge variability of fuel prices across the UK and Europe. Furthermore, Brexit fuel price fluctuations have driven a new epidemic of fuel fraud and theft cases that cost importers and exporters thousands of pounds each year.

Worker shortages

The UK relied in part upon European labor during its time in the Union. In fact, official data shows 188,000 fewer EU workers in Britain in 2022 than before 2020. Workers from European countries like Poland made up a large portion of workers in some industries like trucking. The UK government is now desperate to find British workers willing to serve long term in the world of import and export but is largely unwilling to give these people guarantees of high wages and low taxes. 

Conclusion

We are yet to see the full impact of Brexit on the economy of the United Kingdom. However, the current data shows that the UK administration will have immense challenges to deal with work shortages, fuel prices, and border regulations. And with the UK leaving the single market of the European Union, trade with countries outside the EU will not be as easy as before.