A no-deal Brexit is not only bad for the United Kingdom but also for the Euro Area. They will both loose on it and that`s why a win-win should be a goal for them both. Populist-Italy is already into a recession, and other Euro Area-countries can follow.
Main imports in Euro Area are energy, manufactured goods and machinery. Main import partners are China with 12 percent of total imports and United Kingdom with 10 percent. Imports rose 1,9 percent in December 2018, while exports fell 2,5 percent in the same period.
According to Comtrade`s database, United Kingdom take most of their imports from Germany. 14 percent of their import comes from Germany and a no-deal Brexit means less German cars sold in the U.K. Total value of German imports came in at $89.23B in 2017.
9,5 percent of the import comes from China and 9,4 percent comes from the United States. Both of them outside of the Euro Area. The value of the import from China was 59,78B, and 59,75B from the U.S in 2017.
When it comes to export, the U.K`s biggest trading country is the United States which account for 14 percent. Second is Germany with 11 percent with France on third with 7,6 percent. Total value of exports to the U.S is $59,09B. Germany; $46,64B.
As you can see, the U.K are in balance with the U.S but when it comes to Germany they buy twice as much as the sell to the Germans. In other words they have a trade deficit with Germany. A no-deal Brexit can end up with less BMW and WV cars and more Tesla`s in the U.K.
German factories will lose money and market shares while other brands and countries will prosper. We will face a radical shift in the trade balance.
56 percent of the U.K exports goes to Europe while 40 percent goes to Asia and America. The economy is slowing down and the British economy grew by 0,2 percent on quarter in the three months to December last year. In comparison; the U.S economy advanced an annualized 3,4 percent.
The U.K trade deficit decreased to GBP 0,32 billion in December of 2018. Imports declined 1,6 percent to GBP 55,85 billion and exports fell at a slower 1 percent to GBP 52,62 billion. Balance of trade reached an all time low of -5749 GBP million in October of 2013.
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