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6 Things You Should Know about Trade in the United Kingdom

If you want to stay up-to-date on the state of trade in the United Kingdom, here are six things to stay informed on:

1. Global Shipment Value

The United Kingdom shipped US$459.4 billion worth of goods around the globe in 2021. According to the average exchange rate for 2021, the British pound has increased against the U.S. dollar by almost 7% since 2017 and appreciated by the same percentage in 2021. Since the United Kingdom’s currency is stronger than other currencies, British export is even more expensive for international buyers than when they have to pay in the United States dollars, which is relatively weaker.

2. Export by Value

In 2021, 27.8% of the United Kingdom’s most significant overall exported products by value were gold, turbojets, cars, medication mixes in dosage and crude oil, compared to the overall exported sales of 25.5% in 2020. Its top commodities suggest a diversified range of exported goods. Britain ranks among the world-leading nations for the export of gold, platinum and aircraft parts.

3. Top Buyers

Based on available data, 69.5% of products exported from the United Kingdom were bought by importers from the following countries:

  • The United States of America (13.8% of the global total)
  • Switzerland (9.1%)
  • Germany (8.9%)
  • Netherlands (7.9%)
  • France (5.9%)
  • Ireland (5.1%)
  • China (4.8%)
  • Belgium (4.5%)
  • Italy (2.8%)
  • Spain (2.4%)
  • Hong Kong (2.3%)
  • United Arab Emirates (1.8%)

Based on the percentage value of goods bought per continent, these are the percentage value of the products purchased by importers from around the world exported by the United Kingdom.

  • Fellow European countries (57%)
  • European Union members (45%)
  • Asia (21.8%)
  • North America (15.8%)
  • Africa (2.4%)
  • Oceania (1.6%)

With a population of over 68 million people, in 2021, the U.K.’s total exported products were roughly $460 billion.

4. Top Exported Product

These exported product groups are categorised as the United Kingdom’s global shipment with the highest dollar value in 2021.

  • Machinery, including computers: US$67.6 billion
  • Gems, precious metals: $65.7 billion
  • Vehicles: $40.1 billion
  • Mineral fuels, including oil: $33.7 billion
  • Electrical machinery, equipment: $26.4 billion
  • Pharmaceuticals: $23.3 billion
  • Optical, technical, and medical apparatus: $20.4 billion 
  • Aircraft, spacecraft: $13.9 billion
  • Plastics, plastic articles: $12.3 billion
  • Organic chemicals: $11 billion

5. Trade Surplus

Here is the top 10 products shipment that amounted to a trade surplus for the United Kingdom:

  • Aircraft, spacecraft: US$7.6 billion (Up by 52.4% since 2020)
  • Collector items, art, and antiques: $3 billion (Up by 122.2%)
  • Optical, technical, and medical apparatus: $1.9 billion (Reversing a -$1.4 billion deficit)
  • Books, newspapers, pictures: $1.04 billion (Up by 4.4%)
  • Tanning, dyes, paints, varnishes, ink: $1.03 billion (Down by -0.4%)
  • Iron, steel: $877.9 million (Down by -31.4%)
  • Ships, boats: $786.6 million (Down by -49.8%)
  • Inorganic chemicals: $717.5 million (Up by 47.6%)
  • Arms, ammunition: $661.3 million (Up by 195.2%)
  • Wood Pulp: $416.6 million (Reversing a -$106.5 million deficit)

The United Kingdom has a high trade surplus for aircraft and spacecraft trade, indicating a substantial competitive advantage in this product category. 

6. Trade Deficit

Here is the top 10 products shipment that amounted to a trade deficit for the United Kingdom:

  • Electrical machinery and equipment: -US$34.5 billion (Up by 10.7% since 2020)
  • Vehicles: -$23.6 billion (Up by 8.3%)
  • Gems, precious metals: -$16.9 billion (Down by -74.2%)
  • Machinery including computers: -$11.7 billion (Up by 11.9%)
  • Furniture, bedding, lighting, signs, prefabricated buildings: -$11.1 billion (Up by 51.6%)
  • Knit or crochet clothing, accessories: -$9.7 billion (Up by 30.3%)
  • Wood: -$9.6 billion (Up by 44.7%)
  • Plastics, plastic articles: -$8.7 billion (Up by 13.6%)
  • Toys, games: -$6.3 billion (Up by 42.9%)
  • Fruits, nuts: -$6.3 billion (Up by 3.1%)

Notably, the United Kingdom has negative net exports under the electrical machinery and equipment category, and U.K.’s spending on imported electronics has caused international trade deficits.

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Research Sources:
International Trade Centre
Wikipedia
Investopedia
World Trade

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