UK goods into Germany down 8.5% in further sign of Brexit damage
In what is the latest signal that extra costs and red tape caused by Brexit are damaging the UK’s trading relationships, imports of British goods into Germany decreased by 8.5 percent last year.
The UK also is no longer one of the top five of Germany’s largest trade partners as Brexit-related trade barriers drive German firms to seek for business elsewhere in the Europe.
The EU’s biggest economy has turned to its neighbors inside the eurozone for machine tools, car parts and components for the aerospace industry.
British imports dropped to €32bn (£27bn) in 2021, the first year since the Brexit free trade deal was agreed in late December 2020, according to the German statistical office, Destatis.
However, unlike the UK, the situation improved for many of Germany’s other trading partners, which saw a dramatic rise in sales to Germany.
Total goods imports into Germany soared by 17.1% to €1.2tn during the year, in part because of the extra costs of imported energy, but also after the easing of lockdown restrictions and as vaccine rollouts improved the global economic recovery last year.
The increase included a 16.8% increase in imports from Germany’s fellow EU members, and a 20.8% rise in imports from China.
In December alone, UK imports to Germany were down 18.2% year on year, which according to analysts, was because of a rush of stockpiling in December 2020 as companies prepared for possible Brexit disruption.
Britain left the bloc on January 30, 2020, but its new life with Europe only started following the transition period on December 31, when the UK was no longer bound by the EU’s laws and rules.
As the immediate consequence, customs border checks for import and export returned for the first time in decades, and despite the free-trade deal, queues and disruption from additional paperwork were expected.
Carsten Brzeski, the global head of macroeconomics at ING, said, “Brexit has left its mark on German trade as the UK dropped out of the five most important trading partners list, with German companies exporting more to Austria than to the UK.
“In the run-up to the Brexit deal signed in December 2020 many supporters of the vote to quit the EU single market and customs union said the importance of the UK as a trading partner for Berlin would override new trade frictions.”
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