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UK post-Brexit trade in ‘clear shift’ as India ties show ‘little growth’ and China declines

"The recent trend of friend-shoring, decoupling and de-risking supply chain channels has reduced the opportunities for the UK to expand its trade reach," Stephen Hunsaker, author of the UKICE Trade Tracker said.
"The recent trend of friend-shoring, decoupling and de-risking supply chain channels has reduced the opportunities for the UK to expand its trade reach," Stephen Hunsaker, author of the UKICE Trade Tracker said.

Trade with China has fallen fast in recent years in a “clear shift” in the UK’s post-Brexit trade policy, new research has shown.

Figures from UK in a Changing Europe (UKICE) shows that trade with China has fallen sharply from 10.1 per cent of UK trade in 2021 to 7.9 per cent in 2023.

The decline in trade with China comes despite the post-Brexit emphasis on boosting trade with non-EU countries. It suggests geopolitical considerations are starting to impact trade decisions.

“The recent trend of friend-shoring, decoupling and de-risking supply chain channels has reduced the opportunities for the UK to expand its trade reach,” Stephen Hunsaker, author of the UKICE Trade Tracker said.

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Exchange with other non-EU countries has not fared much better in the past few years, according to UKICE.

Trade with Turkey and India have seen “little growth for more than five years,” the report noted, while dealings with Japan have decreased in the past three years despite signing a trade deal in 2020.

In contrast, trade with the EU hit its highest level since 2008, making up over half of total trade. The US remained the UK’s single largest trade partner, but it came in far behind the EU as a whole.

The impact of Brexit on UK-EU trade has been unevenly felt, with goods exports recording a total decline of 8.2 per cent since 2019.

Services trade meanwhile has performed strongly after a steep fall around the Brexit transition period, which was also impacted by the pandemic. Last year services exports grew 9.5 per cent.

The report comes just a day after after the government published details of new fees, known as the common user charge, which will apply to small imports of animal products and plants from the EU.

The levy will be charged on products like cheese, sausages and yogurt with total payment capped at £145.

The government said the charges, which will come into force at the end of April, will pay for improved border facilities and enhance biosecurity but trade groups warned that it would put up costs for businesses and consumers.

William Bain, head of trade policy at the British Chambers of Commerce said the changes would be a “hammer blow” for small and medium sized importers.

“Importing a small consignment of goods with only five different meat, poultry, egg, milk or some fish products in the medium risk category will now face a bill of £145 per package under these proposals,” he said.

“We urge the Government to reconsider their import charge plans in the coming days,” Bain continued.