German business pessimistic about British trade

Germany’s association of chambers of commerce, the DIHK, has found that the majority of German businesses foresee deterioration in trade conditions with Britain.

60% of German companies consider their business situation in Britain to be bad. 57% of companies also expect the situation to get worse in the course of 2021.  

The report notes [German text] that German companies have invested over €160 billion in the UK. However, the ongoing trend is negative. In 2017, the UK was ranked Germany’s fifth largest trading partner. Currently, the UK ranks only as Germany’s eighth largest trading partner.

Red tape and real uncertainty 

The majority of German companies see customs bureaucracy at the major impediment to Germany-UK trade. In addition, over half respondents are reporting logistical problems sending goods to Britain. 

Uncertainty is also a major concern. German businesses remain wary about the unpredictability of trade conditions in 2021. On the plus side, German firms are slightly less anxious about the prospect of a UK-EU tariff increase.

COVID contraction

In line with global trends amid the COVID pandemic, Germany’s exports contracted by 9.3% during 2020. Imports into Germany also declined.

The country maintained its foreign trade surplus throughout 2020.

Meanwhile, Germany’s Economy Ministry notes that lockdown had affected industry less than other parts of the German economy. The ministry expressed cautious optimism about the prospect for a rebound in export growth.

Issues on both sides of Brexit divide 

In some ways echoes a survey by the British Chambers of Commerce that found 49% of UK exporters report issues with adapting to Brexit.

British manufacturers are particularly affected. 51% of manufacturers report some difficulty adapting to the new regulations on trading goods between the UK and EU.

Holistic Brexit solutions

There can be no disputing that Brexit has produced uncertainty for exporters. The additional red tape can be costly, confusing and time-consuming.

Overnight, businesses have had to master arcane VAT rules and customs regulations.

re:TRADE powered by VAT IT manages VAT, customs and all the Brexit bureaucracy on your behalf. We’ll also optimise VAT refunds, secure preferential trade and find the most cost-effective logistics solution for your business. That means you can leave the red tape to the experts and focus on growing your core business.