Smallest UK firms suffer more in trade with EU after Brexit: report

LONDON | Xinhua | A London-based think tank published a report on Wednesday revealing that Brexit had a more pronounced impact on exports for the smallest United Kingdom (UK) firms compared to medium and large enterprises. Exports to the European Union (EU) dropped by 30 percent for the smallest firms and 15 percent for medium-sized companies.

The study, conducted by the Centre for Economic Performance at the London School of Economics, highlighted the significant trade challenges faced by British firms since the UK’s withdrawal from the EU’s single market and customs union in January 2021.

Imports were also affected, with smaller firms reducing EU imports by 27 percent, while larger firms limited their losses to 14 percent. The study noted a shift in sourcing strategies, with UK businesses increasingly turning to non-EU countries to offset higher costs and complexities in EU trade.

The report underscored the broader economic implications of Brexit on UK trade, estimating a 6.4 percent drop in total goods exports and a 3.1 percent decline in global imports. Losses in EU trade outweighed gains from non-EU markets.

It called for targeted policy support for small and medium-sized enterprises, which have been hardest hit by the new trade barriers, and warned of long-term uncertainties. The report also highlighted that growing regulatory divergence between the UK and EU could further strain trade relations. ■