Brexit impact on UK trade will be clearer after COVID

Significance

Brexit's direct impacts on goods trade are beginning to emerge. In sectors that rely on complex supply chains or are characterised by large capital investments, the full impacts will take some years to materialise. COVID-19 related restrictions on travel have obscured the effects of Brexit on services trade.

Impacts

• Persistent UK-EU tension could force some UK firms to stop trading with the EU or permanently relocate to Europe.
• Lack of trust between London and Brussels will prevent closer trade cooperation over the coming years.
• UK imports will face more disruption once the government ends its temporary light-touch approach to imports, probably after 2021.
• Tension over the Northern Ireland protocol threatens to trigger social unrest in Northern Ireland over the next few months.