It may be small, but the United Kingdom is a major trading power. In 2018 the UK accounted for £1.2 trillion in global trade. Over 232,000 UK businesses currently export, with the number of UK SMEs exporting on the rise too.
As the country enters a period of change, with Brexit on the horizon, we breakdown the outlook for trade – from major partners, to imports, exports and more – so that you can trade with confidence.
The market outlook
As mentioned, over one trillion pounds of trade flowed between the UK and the rest of the world in 2018. This was finely balanced between imports and exports, with imports accounting for £661bn and exports for £629bn. There was less of a balance in the type of trade – goods trade represented £838bn in total, with services at £452bn.
Interestingly there is a balance between EU and Non-EU trade. According to the latest available figures from 2017, the UK’s trade with the EU totalled £619bn; while non-EU trade stood at £639bn.
The UK wants cars… and to holiday abroad!
The key imports and exports for the UK largely reflect those of other major trading nations, but there are some interesting differences.
For example, when it comes to imports, the UK’s major goods are cars (£33bn), medicine & pharma (£24bn) and oil (£22bn) – but when it comes to services, at £54bn, travel far outweighs the next closest service (business – £37bn).
The UK exports far more in services than it imports – and this is dominated by business and financial services, which account for over £138bn. In terms of goods, the UK exports cars (£33bn), machinery (£24bn) and medicine (£24bn) – but aircraft are also highly exported at a total of £19bn.
Partners in trade
Having strong trade partnerships is key for any country, but as an island, the UK has a built important partnerships over the years.
The United States is the country’s main trade partner, representing over 13% of total UK exports. The next four biggest are Germany (9.7%), Netherlands (6.9%), France (6.6%) and Ireland (5.9%) – most of these countries don’t appear amongst the major partners of other big trading powers like USA or China.
China is the country which has grown the most in trade with the UK over the last year. It is the 6th largest partner, growing by 28% over the last 12 months!
The law and regulations
While the UK is currently dealing with the question of Brexit, it is still in the EU right now – which means that the laws and regulations around importing or exporting to and from the country are slightly different whether you’re based in an EU or non-EU country.
If you’re importing from a non-EU country, for example, you’ll need a commodity code to classify your goods for taxes as well as an Economic Operator Registration and Identification (EORI) code – and you will have to pay duties upon your goods or services entering the UK.
Importing from an EU country still requires a commodity code and an EORI code – but you will not pay duties on trade within the EU. You are, however tied to the various EU regulations – which are more thorough than many other countries.
It is also important to remember that, while the UK trades as a single country, it has separate nations – England, Scotland, Northern Ireland and Wales – that each have their own parliaments and powers to change laws and may approach certain things differently.
The UK is a very unique trading power that might be small, but holds one of the world’s biggest markets and is a potentially fruitful home for SMEs too – with SMEs accounting for 99.3% of all private sector businesses in 2018.
Think you’re ready to trade with the UK? Contact our team today to get an instant quotation, or find out how we can help you and your business – www.twill.net