Global Trade and the UK in 2024: A Strategic Overview
The United Kingdom has long been a major player in global trade, and its influence remains strong in 2024. With a diverse economy and trade relationships around the world, the UK offers plenty of business opportunities for both importers and exporters.
In this article, we’ll provide a strategic overview of global trade with the UK in 2024, exploring the country’s trade landscape, key trading partners, driving sectors, and the impact of Brexit on trade relationships.
We’ll also look ahead to the future of strategic trade relationships with the UK, examining market trends shaping the country’s trade landscape and the benefits of forming long-term trade relationships.
Overview of the UK’s Global Trade Landscape
The United Kingdom’s global trade landscape in 2024 is characterised by resilience, adaptation, and strategic realignment. Following some disruptions and/or uncertainties caused by Brexit and the global Covid pandemic, the UK has been actively reshaping its trade relationships and policies to maintain its position as a key player in international commerce.
Despite recent challenges, trade in goods and services in the UK is still growing.
According to 2024 trade statistics, UK goods imports rose by £3.3 billion and exports rose by £2.3 billion. Service exports remain the UK’s strongest export sector, accounting for nearly half of the UK’s total exports in 2023. Across the board, there is strong growth in trade between the UK and EU and non-EU countries.
However, the British economy does face notable challenges when it comes to trade. According to official statistics, the UK has a negative balance of trade – with imports exceeding exports by nearly £42 billion in 2024.
The EU remains a crucial trading partner for the UK, with trade volumes gradually recovering following Brexit disruptions. However, new trade barriers and regulatory changes present challenges for UK-EU trade, and the UK has made significant efforts to diversify trade relationships beyond the European Union. For example, the UK has ongoing free trade agreement negotiations with other countries such as South Korea and Turkey.
The UK’s Top Trading Partners in 2024
In 2024, the UK’s top trade partners continue to reflect a mix of long-standing relationships and emerging economic ties. According to the Office for National Statistics, the top five trade partners for the UK are:
United States: The US remains the UK’s largest single-country trading partner. Top US exports to the UK include:
- Oil, minerals, lime, and cement (25.6% of total)
- Chemicals, plastics, rubber, and leather goods (14.4%)
- Stone, glass, metals, and pearls (14.3%)
The UK’s main exports to the US include vehicles, machinery, and pharmaceuticals.
Germany: Although the UK left the European Union, Germany remains one of the UK’s essential European partners. The UK primarily exports vehicles, machinery, and pharmaceutical products to Germany, while importing automobiles, machinery, and electrical equipment.
China: Trade with China has grown significantly over the past decade. The UK exports luxury goods, education services, and financial services to China, while importing electronics, textiles, and other manufactured goods.
Netherlands: A key logistics hub for UK-EU trade, the Netherlands is a significant partner for both goods and services trading. Major UK exports include mineral fuels and machinery, while imports include agricultural products and chemicals.
France: France is another important European partner for the UK. Trade with France is balanced across various sectors. The UK exports machinery, vehicles, and pharmaceutical products to France, while importing agricultural products, vehicles, and aerospace technology. Trade between the two nations is made easier by the rail link between England and France.
Key Sectors Driving Trade Growth
Some key sectors are driving growth for the UK’s international trade landscape:
Automotive: Despite challenges, the automotive sector remains crucial, with vehicle exports valued at £34.4 billion in 2022. The industry’s shift towards electric vehicles is creating new opportunities for component trade and supply chain reconfigurations.
Pharmaceuticals: The pharmaceutical sector has seen increased demand due to global health pressures. The UK’s pharmaceutical exports were valued at £26.1 billion in 2023, while during the same period, imports were valued at £25.4 billion – a trade surplus of £700 million in pharmaceutical products. This reflects the country’s strength in drug development and manufacturing.
Machinery and equipment: This sector, including industrial machinery, electrical equipment, and precision instruments, accounted for £53.8 billion in exports in 2022, demonstrating the UK’s engineering expertise. In 2022, the UK exported 42 billion USD in machinery and equipment, giving the UK the 10th largest global market share in this sector.
Food and beverages: The UK’s food and drink sector achieved record export figures in the first half of 2023, with export sales rising to nearly £12 billion in the first half of 2023. That’s an increase of £500 million from the same period in the previous year. This growth is mostly due to rising demand in the EU.
Chemicals and related products: This diverse sector, including plastics, organic chemicals, and cosmetics, has also seen some growth. In 2024, there was a £0.3 billion increase in chemical exports to the EU and a £0.9 billion increase in exports of chemicals outside the EU.
These sectors not only boost exports but also shape the UK’s import needs, significantly influencing the country’s overall trade balance and international economic relationships.
Impact of Brexit on UK Trade
The UK’s departure from the European Union has significantly reshaped its trading landscape, presenting both challenges and opportunities for businesses looking to trade with the country.
One of the most notable impacts of Brexit has been the divergence of UK and EU regulations. In many areas, UK regulations and economic policy remain closely aligned with the EU. But now the UK also has the freedom to set its own rules and standards, which has led to some differences in product regulations, labelling requirements, and safety standards.
For example, the UK has introduced a UKCA (UK Conformity Assessed) marking to replace the EU’s CE marking for certain products.
However, despite some regulatory divergence, the UK has maintained similarity in many areas to facilitate smoother trade. For example, the UK’s data protection law, the UK GDPR, closely mirrors the EU GDPR. This alignment helps businesses that have already complied with EU regulations to more easily adapt to UK requirements.
Challenges in Customs Documentation
Post-Brexit there are also challenges related to increased paperwork and customs procedures, as businesses now need to complete customs declarations for goods moving between the UK and EU. This can lead to longer processing times and additional costs. There are also new rules of origin requirements to navigate, which determine whether goods qualify for tariff-free trade under the UK-EU Trade and Cooperation Agreement.
An international trade consultant can help importers and exporters understand the different customs procedures when moving goods between the UK and EU countries.
Benefits
While many challenges have come with exiting the EU, Brexit has also brought about some trade advantages. The UK now has the flexibility to negotiate its own trade deals, potentially opening up new markets and opportunities. For example, the UK has recently signed trade agreements with countries like Japan and Australia, which offer preferential terms for certain goods.
Another positive development is the UK’s introduction of its own Generalised Scheme of Preferences (GSP), which offers tariff reductions to developing countries. This could help businesses in these countries to export to the UK more competitively.
While Brexit has undoubtedly complicated trade with the UK in some respects, it has also created new possibilities. By staying informed about regulatory changes and seeking expert assistance, businesses can successfully navigate these challenges and capitalise on the opportunities in the evolving UK market.
International trade consultancy firms like clearBorder can provide invaluable assistance in navigating the post-Brexit trading landscape.
With expert training and consultation, clearBorder can help businesses understand customs procedures, regulatory compliance, and supply chain optimisation. They can help businesses understand the specific requirements for their products and ensure compliance with UK regulations post-Brexit.
Strategic Trade Relationships: Looking Ahead
As the United Kingdom continues to redefine its place in the global trade landscape post-Brexit, it presents opportunities for businesses worldwide to forge strategic trade relationships. The UK’s status as a leader in world trade, coupled with its commitment to fostering international partnerships, makes it an attractive market for long-term business relationships.
Several market trends are shaping the future of UK trade:
- Sustainability requirements: The UK is at the forefront of the green revolution, with ambitious targets for reducing carbon emissions. This creates opportunities for businesses offering sustainable products or services, from renewable energy technologies to eco-friendly consumer goods.
- Healthcare and life sciences: With an ageing population and world-class research institutions, the UK offers significant opportunities in pharmaceuticals, medical devices, and biotechnology.
- Advanced manufacturing: The UK’s focus on high-value manufacturing, particularly in aerospace, automotive, and precision engineering, presents opportunities for suppliers and innovators in these sectors.
Why Trade with the UK?
For companies based overseas, building long-term relationships with UK businesses is a good strategy for several reasons. The UK’s stable business environment, strong intellectual property protections, and commitment to free trade provide a solid foundation for enduring partnerships.
Moreover, as the UK continues to negotiate new trade agreements globally, partners of UK businesses may find themselves benefiting from improved market access in other countries as well.
The UK’s reputation for quality and innovation can also enhance the credibility of businesses associated with it. By aligning with UK partners or establishing a presence in the UK market, companies can potentially leverage this reputation to boost their own brand image globally. As the UK continues to shape its role in global trade, those who establish strong ties now may find themselves well-positioned to capitalise on future opportunities in the UK and beyond.
Global Trade, the UK, and Your Business
Looking ahead to 2025 and beyond, the UK’s global trade landscape presents many opportunities and challenges. By partnering with an experienced international trade consultancy firm like clearBorder, you can gain the knowledge, skills, and support needed to anticipate challenges, capitalise on opportunities and increase international supply chain resilience.
With clearBorder’s expert training and consultation services, businesses of all sizes can understand the intricacies of global trade. Whether you’re looking to import goods into the UK or export products to the UK’s major trading partners, clearBorder can provide tailored guidance to help you stay compliant with regulations, navigate the customs process, and avoid costly delays or fines.
Contact clearBorder today to get started.
FAQs: Trade with UK
What Import and Export Regulations Should I be Aware of?
The UK has a range of import and export regulations, including customs duties, VAT, and product-specific requirements. Import and export regulations differ depending on the other country engaged in trade and the goods being imported/exported. Products must also meet UK standards for safety, labelling, and quality.
To fully understand what regulations you should be aware of, contact an international trade consultant like clearBorder. clearBorder has years of experience in global trade and stays up-to-date on the latest UK trade regulations and requirements. The experts at clearBorder can assess your situation and determine which regulations apply specifically to your business.
What Support is Available for Businesses New to Trading with the UK?
The UK government offers a range of support services for businesses looking to trade with the UK, including advice from the Department for International Trade and funding opportunities through UK Export Finance. International trade advisors can also provide a wealth of information and support to businesses new to trading with the UK: