Blog Post

Trade flows between the US, UK and EU27: what goes where?

As US President Trump and UK Prime Minister Theresa May meet in Washington, Bruegel researchers look at bilateral trade flows between the US, UK and EU27.

By: and Date: January 27, 2017 Topic: Global Economics & Governance

Donald Trump is President of the United States and the United Kingdom is leaving the European Union. It is reasonable to expect disturbances in the global trade order. Prime Minister May’s meeting with President Trump puts trade relations between the EU, the US and the UK in the spotlight. To inform this debate, it is certainly useful to measure the forces at play on the international trade chessboard.

The chord diagram below shows total imports and exports for the three considered countries/blocs. Bilateral trade flows are indicated by the ‘chord’ connecting two trade partners, with the width of the chord displaying the value of the flow. Data are based on UN Comtrade and refer to trade in goods among the world’s 43 largest economies.

Source: GED Viz, a web tool for visualizing complex economic relations developed by Bertelsmann Stiftung.

Note: each bilateral trade flow relies on data reported in import statistics, which are considered more accurate given the custom systems in place to collect tariff revenues.

Trade flows between the EU, the US and the UK

 

From the British perspective, the other 27 members of the EU represent the largest destination market for exports and the most important source of imports. However, bilateral trade in goods between UK and the rest of the EU is not balanced. As a matter of fact, the UK ran a trade deficit with the rest of the EU amounting to US$ 151 billion in 2015. This deficit has increased from US$ 139 billion to US$ 151 billion since 2014 (based on import statistics).

The UK’s trade flows with the US are much smaller than with the EU27. The UK’s goods exports to the US are only one quarter of what it exports to the EU27. And imports from the US are about one sixth of imports from the EU27.

From the US perspective, the UK is a small trading partner – also in relation to the EU27. Among its trade with the largest 43 economies, only 4.9% of US goods exports go to the UK. 20.8% go to the rest of the EU.


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