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UK trade has grown by 3% over the past year, mostly pushed by a 4% rise in imports and increased trade with countries outside of the European Union (EU), according to the Government’s latest report on the UK’s trade data. 

The report paints a picture of a strong and expanding UK trade, with an export sector that remains resilient to tariffs. However, lacklustre growth in EU trade shows the lasting impacts of Brexit and the expansive adjustments made necessary by higher tariffs. 

Imports lead growth, with exports on the rise

The UK remained a net importer and retained its position as the 4th largest exporter and importer in the world, far ahead of Japan and India despite its smaller economy. Exports remain buoyed by trade in services, which grew by 3% just in the first few months of 2025; export in goods, on the other hand, decreased by about £5 billion as of May 2025, a 5% decrease compared to the previous year. 

This could in part be due to the tariff turmoil. As part of the Liberation Day tariff regime, Trump announced a 25% tariff on all foreign cars, which came into force in April. In response, Jaguar Land Rover, the UK’s second-largest car producer, paused all exports to the US; it has since been followed by Audi and Volvo, who announced this decision last week. 

As headlines focus on tariffs on individual countries – who are in many cases yet to go into effect after a series of pauses to aid negotiation – it may be tariffs on individual sectors to wreak the most short-term damage. So far, services, the UK’s fastest-growing export sector, do not look likely to be affected; threatened tariffs on pharmaceuticals and metals, on the other hand, could have more wide-ranging implications for the British economy.

The automotive sector has long been the UK’s biggest export industry, responsible for £31 billion of its exports every year. The US is the second-largest export market for British cars after the EU; as UK trade with both countries looks to be plateauing, its car industry may continue to suffer – and its exports with it. 

A rise in global ties

The most striking statistic in the report was the 7.4% growth in non-EU imports, which has been accelerating even more in recent months. This may reflect a broader trend by the UK, which tries to reorient itself in the face of looming US tariffs and a distancing EU. 

An “ambitious and comprehensive” trade deal with India, set to be signed in two days, could boost trade between the two economies even further. India, one of the world’s fastest-growing economies, has a strong trade relationship with the UK, with UK exports to India nearly doubling since 2018. The deal sees India remove levies on UK goods like whiskey and medical machinery and provides for easier immigration practices for Indian workers, leading to an estimated 60% increase in UK exports to India. 

The skeleton of a trade deal with the US to potentially circumvent some of the Liberation Day tariffs, as well as recent talks with Turkey over an update to their mutual Free Trade Agreement, show the UK’s willingness to negotiate beyond the EU to expand its export markets. 

Regional inequality persists

As in most other areas of the UK economy, export and import production was focused in London and the South-East, with the North-East and Northern Ireland seeing just 2% and 0.17% of the nation’s total exports respectively. The closure of the Lindsey oil refinery in North Lincolnshire last month struck a further blow to regional industry, potentially disrupting energy supply for other heavy manufacturing in the UK.

 The UK government’s New Trade Strategy, announced in June, will expand export capacity for small businesses and make it easier for British businesses to safely trade abroad. Efforts by UKEF, the UK state export finance provider, to increase uptake of trade finance and insurance facilities by firms in the North could also help bridge the inequality, boosting export growth in the long term.

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Overall, the data shows the UK export market has remained strong despite headwinds. The UK remains a world leader in trade, punching far above its weight and leading the global rise in services trade. Developments like a shift away from goods trade and the EU will require businesses trading internationally to evolve, but will provide unprecedented opportunities for expansion for those who see them.