UK-German Trade Relationship Suffers on Account of Brexit Uncertainties

Ongoing uncertainties surrounding Brexit have caused the UK to slip two places in rankings in 2019 from being Germany’s fifth-largest trading partner, based on trade data till July this year. Prior to the Brexit referendum, UK-Germany trade relationship had touched a record high of €89 billion, making UK the fifth most important trading partner for Germany.

Since the Brexit referendum in 2016, however, German exports to the UK have been witnessing a steady decline on account of rising uncertainty of how Brexit will play out. The trade relationship between Germany and the UK, including exports and imports, was worth €68.5bn between January and July 2019. German exports to the UK declined by 4.6% YoY while imports from the UK declined by 3.7% YoY during this period.

According to data released by the Statistics Office, the hardest hit sector has been the automotive industry. German auto exports to the UK declined by 9.7% in January-July 2019 while auto imports from the UK slid 9.1% lower during this period. With no clarity yet on the Brexit deal and the German economy threatening to slip into recession, this data casts more gloom on the outlook for the health of Eurozone’s largest economy.