Transcription
Brexit cost the United Kingdom 27 billion pounds in lost trade in the first two years. As of 2025, Brexit has made the UK economy between 6% and 8% smaller than it would have been if it had remained in the EU. Things aren't looking good.
Brexit brought about uncertainty, a lot of it. And in global trade, uncertainty is poison. Businesses don't like unstable rules, shifting paperwork, or unpredictable borders. While these countries were once Britain's closest and most reliable trading partners, many of them have quietly started looking elsewhere. And Britain is feeling the consequences. How did Brexit affect trade with seven of Britain's top former trading partners? How bad were the losses really? And after years of adjustment, is there any realistic path to recovery? Or is this the new normal?
Number seven, Germany. In January 2021, DB Shanker, a major logistics company owned by German rail giant Deutsch Barn AG, suspended deliveries to the United Kingdom. With about 76,000 employees in 2,100 locations, DB Shanka reported significant problems with deliveries to the UK. What problems? Customs procedures, paperwork, and border delays. You name it. From once being able to deliver goods to and from the UK effortlessly, DB Shanka now has to put in more work. What changed? Well, notice the timeline here. Pre-2021, [music] everything was flowing smoothly. And then immediately in January of that year, things changed. Looking at the bigger picture here, the entire socopolitical and economic landscape of the United Kingdom changed. 2021 marked the end of the UK EU's agreed upon transition period. Brexit was now a reality and German companies started to realize things would never be the same again.
According to Richard Bartler, a Brexit and trade advisor at Export Unlocked, if DB Shanka is struggling with incorrect or incomplete paperwork, well, what hope is there for small and medium-sized logistics firms? And he was right. Once Britain left the single market, every shipment between the United Kingdom and Germany became subject to customs declaration, safety checks, VAT documentation, and regulatory checks. For larger companies such as DB Shanka, the new system was manageable but costly. For small to medium-sized businesses, it wasn't logistically feasible anymore. In 2020, Michael Gove, served as the de facto deputy prime minister, warned businesses that [music] significant change with inevitable border checks for almost everybody who imports from the EU from 2021. Boris Johnson, while claiming that the UK had taken back control of trade law and its borders after Brexit, admitted that there would be some teething issues at first. Their workaround was to introduce the TCA, the trade cooperation agreement. This agreement removed tariffs and quotas from trading goods only if the rules of origin were met. But it also ended the UK's automatic access to the single market and replaced EU law with international law. It's important to remember here, zero tariffs didn't mean zero friction. On Germany's side, the EU customs code dictated that all goods entering the country would meet certain criteria: export declarations, import declarations, commodity codes, customs valuation, and proof of origin. Things that didn't exist while the UK was in the single market now became crucial overnight.
According to the Federal Statistics Office, Datis, Germany exported goods to the value of 64.4 billion to the United Kingdom in 2021. Compared with 2020, exports to the United Kingdom decreased further by 2.5% in 2021. But what now? As of 2025, trade between Germany and the UK has stabilized somewhat. However, one consequence of the UK's withdrawal was that German hubs switched over to EU member nations.
Number six, Netherlands. Before Brexit, the Netherlands played a unique role in Britain's supply chains. It was not just a trading partner, but a gateway. Huge volumes of goods, especially from non-EU countries, entered Europe through Dutch ports like Rotterdam and then moved onto the UK as reexports or transit trade. After Brexit, moving goods through the Netherlands to the UK became a lot less attractive, especially for transit trade. Although the UK formally left the EU in January 2020, trade only really changed in January 2021 when the transit period ended. And from that point on, goods coming from non-EU countries and passing through the Netherlands on their way to the UK were hit hardest. By early 2022, the value of these transit and quai transit flows was 20% lower than in 2015, the year before the Brexit referendum. The big reason is cost and complexity. Goods that aren't made in the EU or the UK can now be taxed twice, and traders face customs paperwork and inspections at both borders. As a result, many UK firms now import directly, skipping the Netherlands entirely.
Interestingly, while transit trade fell, Dutch domestic exports to the UK held up much better, sitting about 30% higher than 2015 levels in early 2022. High prices for chemicals and fuels helped, and some stricter rules, especially in agriculture, hadn't fully arrived yet. Food exports barely grew overall as fresh produce struggled with inspections and delays. But other sectors surged. Chemical exports rose 47%. Machinery and equipment jumped 61%, and exports of flowers, plants, and vegetable oils more than doubled in value. On top of that, service exports to the UK nearly doubled, driven by business and transport services, even as the UK tourism spending in the Netherlands fell sharply.
Number five, France. Here's something that'll interest you. This graph shows the total import and export value between the United Kingdom and France. Notice the upward trend from 2022 onward. As of 2025, France is the fifth largest UK export market with Q1 export trade valuations from the UK at 45.7 billion. That's simply a lot. Now, there's something else in this graph that needs to be addressed. What happened between 2020 and 2021? Brexit nearly jeopardized one of the United Kingdom's most important trading relationships. Besides exiting the single market, reintroducing the red tape, and saying goodbye to the European Union, the Brexit government saw a contentious time with France's pro-EU government. Trade wasn't the only thing that was being affected. The biggest change, whether we're talking about trade or foreign relations, was reliability.
Here's a fun fact. Under President Charles de Gaulle, France actively tried to stop the UK from joining the European Economic Community, precursor to the EU, by vetoing its membership applications in 1963 and again in '67, fearing British economic incompatibility, Commonwealth ties, and a strong US influence undermining European unity. Britain eventually joined in 1973 after Deaul left office. Before the 2016 referendum, French leaders, including then President Francois Holland, publicly stated they wanted the UK to stay in the EU and warned of the consequences that would follow. Speaking exclusively about trade, the Dova Cali route, which handles a huge share of UK France trade, became subject to customs checks and paperwork on both sides. Small exporters, particularly in food, drink, and consumer goods, struggled with delays, spoilage risk, and higher compliance costs. Many simply stopped exporting. Again, there wasn't much that France could do in the aftermath of such a massive change besides, of course, adjust. UK exports to France grew by about 17.5% in 2022 compared with 2021, while French exports to the UK rose by around 23.6% over the same period. Official UK government figures show that in the 12 months to mid-2025, France ranked as the UK's fifth largest trading partner in that period, bringing us back full circle.
Number four, Ireland. The United Kingdom chose to leave the European Union. Ireland did not. If anything, EU member nations strengthened their relationship with Ireland after the UK left. It was, after all, the next best thing. Not to discount Ireland's own economic contributions to the EU, the nation served as a gateway between the member states and the UK. But what about Ireland's economic relationship with the UK? As the only member state sharing a land border with the UK, the impact of Brexit on trade flows between Ireland and Northern Ireland was a major consideration of the exit negotiations, both for economic and broader political considerations. This led to a unique customs status being developed for Northern Ireland, which resulted in it being a member of both the EU and UK customs areas.
This graph shows Irish exports and imports from Great Britain and Northern Ireland between 2015 and 2021. Simply from before the referendum to when the UK formally exited. And here's one for Irish exports. What do you see? Ireland's trade with the UK didn't move as one single block. Instead, Brexit created a clear split between Great Britain and Northern Ireland, and that split shows up strongly in the data. Irish exports to the UK look fairly steady over time, while exports to the rest of the EU and the wider world keep growing. Imports tell a different story. The UK used to be a major source of goods for Ireland, but imports from the UK dropped sharply in 2021, even though Ireland's overall imports actually increased. Ireland started buying more from the EU and other countries and less from Great Britain once Brexit rules kicked in. Trade was affected, yes, and well, why wouldn't it be? But with Ireland, there was a larger issue to address too, bringing up the past. You see, while the UK drew the line at remaining a member of the EU, it also risked jeopardizing its relationship with Ireland. How? Well, the only way it could leave the EU single market wholly was to draw a harder border with Ireland. This though would have tampered with the Good Friday Agreement. The solution, the Northern Ireland Protocol. Before Brexit, trade across the Ireland of Ireland was completely frictionless. Under the protocol, Northern Ireland stayed aligned with EU rules for goods, even though it remained legally part of the UK. That meant Northern Ireland effectively stayed inside the EU single market for goods while Great Britain left it. As a result, goods would continue to move freely between Northern Ireland and Ireland with no checks, protecting crossborder trade and supply chains.
Number three, Belgium. Brexit was worse for the UK than it was for Belgium. At least that's what a 2023 report from the Luben University claimed. As a refresher, Brexit was positioned as a turning point in the UK's history by campaigners who argued that the EU had stripped the country of its autonomy. Talking specifically about Belgium, Hulk Vanderbush admitted that between 2018 and 2021, trade from the EU to the UK was around 18% lower than it would have been without Brexit. Belgium's goods exports to the UK fell by 13%. This equates to a 4 billion decrease in goods exports and between 28,000 and 32,000 fewer jobs. But it's not as grim as you'd think. Take the lost jobs as an example. It's not like Belgium workers stayed unemployed during this shift. They just relocated elsewhere. While they had the ability to do that because of free movement within EU member states, the UK lost its ability to replace such a major chunk of its workforce.
Here's a chart that shows a time series for trade between the UK and Belgium for each year between 2015 and 2024. Keeping up with the trend in today's video, things looked bad after Brexit. [music] In the years leading up to the Brexit referendum, Belgium consistently ranked amongst the [music] UK's top 10 trading partners with total UK Belgium trade in goods and services worth roughly 40 to 45 billion pounds a year in 2015 and 2016. Belgium was especially important. Belgium remained a major UK trading partner after Brexit, but the relationship was fundamentally reshaped.
Number two, Italy. The year is 2020 and Italy's former prime minister Guispici Conte asked his UK counterpart to do the right thing. Brexit was shaping up to become a reality and no EU member nation wanted that. Conte particularly was under pressure by Italian exporters to either stop Brexit from happening or work out a deal with the country that wouldn't impact Italian trade. In 2016-2019, total UK Italy trade in goods and services averaged 40 to 4 billion per year. In 2019, UK exports to Italy were around 14 to 5 billion, while imports from Italy were roughly 30 billion. With no customs checks, no rules of origin paperwork, and no border delays, supply chains ran smoothly, especially in automotive components, machinery, and agri-food trade. Before Brexit, trade with Italy grew steadily as part of tightly linked EU supply chains. Cars, machinery, pharmaceuticals, food, and luxury goods moved freely with no customs checks or paperwork slowing things down. That changed in January 2021. Since then, Italian exporters have had to deal with customs declarations, rules of origin, forms, and extra food and safety checks, all of which add time, cost, and uncertainty.
Number one, Spain. In the years just before Brexit, total UK Spain trade in goods and services regularly sat around 40 to 4 billion pounds a year, driven by food and drink, vehicles, chemicals, machinery, and tourism-linked services. But everything changed in 2021. UK Office for National Statistics data shows UK goods imports from the EU fell dramatically in early 2021, and Spain was part of that broader collapse in EU UK trade laws. While trade began to stabilize after the initial shock, it did not return to its old trajectory. By 2023-2024, UK Spain trade had recovered in value terms but remained below what pre-Brexit trends would have predicted. Eurostat and ECB analysis shows EU UK goods [music] trade as a whole staying below pre-Brexit levels. Spain adapted as others did by shifting some exports towards EU markets and reducing reliance on the UK.
And so, if it wasn't obvious already, Brexit changed the way nations traded with the UK, especially EU member states that just couldn't afford the risk anymore. Brexit was framed as the next best thing for the people of the UK, but it ended up straining the country's relationship with its former key trading partners. The UK became unreliable, and the cost of trading through red tape just wasn't worth it anymore. While trade relationships stabilized somewhat, it just hasn't been the same anymore. Will it ever be the same? Let us know what you think.