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UK goods into Germany down 8.5% in further sign of Brexit damage | Germany


Imports of UK goods into Germany fell 8.5% last year, in the latest signal that extra costs and red tape related to Brexit are damaging British trading relationships.

Britain also fell out of the top five of Germany’s largest trade partners as the EU’s biggest economy turned to its neighbours inside the eurozone for machine tools, car parts and components for the aerospace industry.

The German statistical office, Destatis, said UK imports fell in 2021, the first year since the Brexit free trade deal was agreed in late December 2020, to €32bn (£27bn).

However, the situation improved for many of Germany’s other trading partners, which enjoyed a big rise in sales to Germany.

Total goods imports into Germany surged by 17.1% during the year to €1.2tn, in part due to the extra costs of imported energy, but also after the easing of lockdown restrictions and as vaccine rollouts spurred the global economic recovery last year.

The increase included a 16.8% rise in imports from Germany’s fellow European Union members, and a 20.8% rise in imports from China.

In December alone, German imports from the UK were down 18.2% year on year, which analysts said was due to a rush of stockpiling in December 2020 as firms prepared for possible Brexit disruption.

The EU introduced checks on goods from Britain entering the bloc as soon as the Brexit deal came into effect, with experts warning that UK firms were losing their competitiveness.

The value of German goods arriving in Britain has also fallen. The UK delayed its checks on goods coming in until 2022. But even so, German exports to the UK fell by 2.6% during 2021, to €65.4bn.

Overall, German exports rose by 14% in the year, even as the pandemic continued to cause disruption to global supply chains.

Destatis said: “Compared with the same month last year, exports to the UK dropped by 7.6% to €5bn in December 2021. Imports from the UK were down 18.2% to €2.6bn.”

Carsten Brzeski, the global head of macroeconomics at ING, said the trade data showed that Brexit had left its mark on German trade.

He said: “Looking at export destinations, 2021 clearly marks a structural shift, illustrating current themes including reshoring, slowing of Chinese growth and different ways to deal with the pandemic.

“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.”

In 2020, figures from the World Bank showed £49bn of goods were exported to Germany, making Germany the UK’s second largest export market for goods after the US.

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For imports of goods, Germany was the largest trading partner with £66.1bn of goods being imported in 2020, according to the ONS.

A report by parliament’s financial watchdog on Wednesday urged ministers to secure further agreements with the EU to ease trade across the channel.

The public accounts committee said fresh EU regulations were likely to hit trade when they come into force in September unless the infrastructure at ports is improved.



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