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Visualizing the UK and EU Trade Relationship

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Visualizing the UK and EU Trade Relationship

With Brexit solidified and a new trade deal having been struck between the UK and the EU, it appears that a sense of normalcy has returned to the European continent.

The Trade and Cooperation Agreement (TCA) between the two entities came into effect on January 1st, 2021, corresponding with the UK officially leaving the EU Single Market and Customs Union on the same day. The new deal will help the status quo of trade continue, but how important is trade between the EU and the UK?

This visualization, using data from the British House of Commons’ Statistics on UK-EU Trade Briefing Paper, reveals the significance of trade between the UK and EU member states.

Who Does the UK Trade With in the EU?

The EU is the UK’s biggest global trading partner, representing 47% of the country’s total trade.

To break it down further, the EU is the buyer of 42.6% of the UK’s total exports, while also being the source of 51.8% of their total imports. Here’s a closer look at exports and imports by country.

Country % of UK's Exports to the EU% of UK Imports from the EU
🇩🇪 Germany18.9%20.9%
🇳🇱 Netherlands14.2%13.8%
🇫🇷 France13.7%12.1%
🇮🇪 Ireland13.6%8.0%
🇮🇹 Italy6.9%6.8%
🇪🇸 Spain6.8%8.6%
🇧🇪 Belgium6.1%7.7%
🇸🇪 Sweden3.4%3.3%
🇵🇱 Poland2.6%3.9%
🇩🇰 Denmark2.2%2.2%
🇱🇺 Luxembourg1.8%1.0%
🇦🇹 Austria1.1%1.4%
🇨🇿 Czech Repbulic1.1%1.8%
🇫🇮 Finland 1.1%0.8%
🇵🇹 Portugal1.1%1.5%
🇬🇷 Greece0.9%1.0%
🇷🇴 Romania0.9%1.1%
🇭🇺 Hungary0.7%1.3%
🇲🇹 Malta0.7%0.2%
🇨🇾 Cyprus0.6%0.3%
🇸🇰 Slovakia0.5%0.9%
🇧🇬 Bulgaria0.3%0.4%
🇱🇹 Lithuania0.3%0.4%
🇱🇻 Latvia 0.2%0.3%
🇸🇮 Slovenia0.2%0.1%
🇭🇷 Croatia0.1%0.2%
🇪🇪 Estonia0.1%0.1%
🇪🇺 Total EU 28100%100%

The UK’s biggest trading partners within the EU are Ireland, Germany, the Netherlands, and France. Germany comes in at number one, making up nearly 21% of the UK’s imports and receiving almost 19% of the country’s exports.

Here’s a breakdown of the trade balances between the UK and the individual EU member states.

uk trade with eu

What’s in the Bag?

In any trade relationship, it’s also worth examining what types of products and services are switching hands.

Top Imports

The UK’s top three goods imports from the EU (in terms of percentage of total imports) are:

  • Motor vehicles (18%)
  • Pharmaceuticals (7%)
  • Electric machinery and appliances (4%)

Without the new agreement, goods would face tariffs based on the World Trade Organization’s standards. For example, motor vehicles, would have an average tariff of 10% imposed on them, without the provisions of the agreement.

The UK’s top three service imports from the EU are:

  • Travel (33%)
  • Business services (27%)
  • Transportation (18%)

Looking at services, the main import from the EU is travel, followed closely by business services and transportation. Travel makes the top three, as many countries in the EU make attractive vacation spots for UK citizens.

Top Exports

The UK’s top three goods exports to the EU (in terms of percentage of total exports to the EU) are:

  • Petroleum and petroleum products (12%)
  • Motor vehicles (10%)
  • Transport equipment (6%)

In terms of exports, petroleum is the UK’s largest export to the EU, representing 68% of the country’s total petroleum exports.

The UK’s top three service exports to the EU are:

  • Business services (33%)
  • Financial services (21%)
  • Travel (14%)

The main service export is business services, such as accounting, legal, advertising, R&D, engineering, and so on. Travel to the UK is a significant revenue generator as London is one of the top tourist destinations in the world.

EU vs. Global Trade

The UK’s relationship with other countries has remained steady. China is one of the country’s most important export destinations, growing 7% per year from 2010-2019.

At the same time, the UK’s exports to the United States have grown just over 4% per year over the same period, continuing to increase at a similar rate up to 2030.

uk trade with eu

While the UK currently has a £79 billion ($108 billion) trade deficit with the EU, they have a surplus of £49 billion ($67 billion) with non-EU countries. Additionally, the share of the UK’s exports going to the EU has been consistently falling over the last number of years. Foreign direct investment flows between the two entities have also been drastically reduced.

However, the UK and EU trade relationship is still highly intertwined and significant. Not only are the two connected through intangible flows but physically as well via pipelines, transport highways, and cables. In a typical year, 210 million passengers and 230 million tonnes of cargo are transported between the two entities.

The TCA will help to regulate these flows and continue a sense of status quo, however, it’s worth noting that if EU regulations are not met, tariffs could be imposed.

The Economist Intelligence Unit recently determined risk and resilience factors for different UK industries based on the agreement. The report found that the food & agriculture, automotive, and financial services industries are most at risk, due to interconnected supply chains and the risk of tariffs being imposed. The life sciences and tech industries stand to do the best.

The Trade and Cooperation Agreement

Overall, Brexit has had significant ramifications for all nations involved. Ireland, for example, is now geographically cut off from the EU, creating potential obstacles for both the movement of people and goods.

Now, after years of discussions, the UK and the EU have finally agreed to the terms for their new relationship, with a focus on sustainable trade, citizens’ security, and governance for long-standing cooperation, in order to guarantee a level playing field. The TCA has helped ease the transition, and while they’re no longer in a union, the UK and the EU have created a strong base for trade to continue normally.

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Energy

Mapped: Which Ports are Receiving the Most Russian Fossil Fuel Shipments?

Russia’s energy exports have become a hot topic. See which ports received fossil shipments during the first 100 days of the Ukraine invasion

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As the invasion of Ukraine wears on, European countries are scrambling to find alternatives to Russian fossil fuels.

In fact, an estimated 93% of Russian oil sales to the EU are due to be eliminated by the end of the year, and many countries have seen their imports of Russian gas plummet. Despite this, Russia earned €93 billion in revenue from fossil fuel exports in the first 100 days of the invasion.

While the bulk of fossil fuels travel through Europe via pipelines, there are still a number marine shipments moving between ports. The maps below, using data from MarineTraffic.com and Datalastic, compiled by the Centre for Research on Energy and Clean Air (CREA), are a look at Russia’s fossil fuel shipments during the first 100 days of the invasion.

Russia’s Crude Oil Shipments

Much of Russia’s marine shipments of crude oil went to the Netherlands and Italy, but crude was also shipped as far away as India and South Korea.

world map showing the top ports receiving russian crude oil

India became a significant importer of Russian crude oil, buying 18% of the country’s exports (up from just 1%). From a big picture perspective, India and China now account for about half of Russia’s marine-based oil exports.

It’s important to note that a broad mix of companies were involved in shipping this oil, with some of the companies tapering their trade activity with Russia over time. Even as shipments begin to shift away from Europe though, European tankers are still doing the majority of the shipping.

Russia’s Liquefied Natural Gas Shipments

Unlike the gas that flows along the many pipeline routes traversing Europe, liquefied natural gas (LNG) is cooled down to a liquid form for ease and safety of transport by sea. Below, we can see that shipments went to a variety of destinations in Europe and Asia.

world map showing the top ports that received Russian liquefied natural gas

Fluxys terminals in France and Belgium stand out as the main destinations for Russian LNG deliveries.

Russia’s Oil Product Shipments

For crude oil tankers and LNG tankers, the type of cargo is known. For this dataset, CREA assumed that oil products tankers and oil/chemical tankers were carrying oil products.

world map showing the top ports that received Russian oil product shipments

Huge ports in Rotterdam and Antwerp, which house major refineries, were the destination for many of these oil products. Some shipments also went to destinations around the Mediterranean as well.

All of the top ports in this category were located within the vicinity of Europe.

Russia’s Coal Shipments

Finally, we look at marine-based coal shipments from Russia. For this category, CREA identified 25 “coal export terminals” within Russian ports. These are specific port locations that are associated with loading coal, so when a vessel takes on cargo at one of these locations, it is assumed that the shipment is a coal shipment.

world map showing the top ports that received Russian coal shipments

The European Union has proposed a Russian coal ban that is expected to take effect in August. While this may seem like a slow reaction, it’s one example of how the invasion of Ukraine is throwing large-scale, complex supply chains into disarray.

With such a heavy reliance on Russian fossil fuels, the EU will be have a busy year trying to secure substitute fuels – particularly if the conflict in Ukraine continues to drag on.

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Energy

Explainer: What Drives Gasoline Prices?

Gasoline prices across the U.S. have reached record-highs. Why? This graphic helps explain what factors influence the cost of gasoline.

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What Drives Gasoline Prices?

This was originally posted on Elements. Sign up to the free mailing list to get beautiful visualizations on natural resource megatrends in your email every week.

Across the United States, the cost of gas has been a hot topic of conversation lately, as prices reach record-breaking highs.

The national average now sits at $5.00 per gallon, and by the end of summer, this figure could grow to $6 per gallon, according to estimates by JPMorgan.

But before we can have an understanding of what’s happening at the pump, it’s important to first know what key factors influence gasoline prices.

This graphic, using data from the U.S. Energy Information Administration (EIA), outlines the main components that influence gasoline prices, providing each factor’s proportional impact on price.

The Four Main Factors

According to the EIA, there are four main factors that influence the price of gas:

  • Crude oil prices (54%)
  • Refining costs (14%)
  • Taxes (16%)
  • Distribution, and marketing costs (16%)

More than half the cost of filling your tank is influenced by the price of crude oil. Meanwhile, the rest of the price at the pump is split fairly equally between refining costs, marketing and distribution, and taxes.

Let’s look at each factor in more depth.

Crude Oil Prices

The most influential factor is the cost of crude oil, which is largely dictated by international supply and demand.

Despite being the world’s largest oil producer, the U.S. remains a net importer of crude oil, with the majority coming from Canada, Mexico, and Saudi Arabia. Because of America’s reliance on imports, U.S. gas prices are largely influenced by the global crude oil market.

A number of geopolitical factors can influence the crude oil market, but one of the biggest influences is the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia.

Established in 1960, OPEC was created to combat U.S. dominance of the global oil market. OPEC sets production targets for its 13 member countries, and historically, oil prices have been linked to changes in OPEC production. Today, OPEC countries are responsible for about 60% of internationally traded petroleum.

Refining Costs

Oil needs to be refined into gasoline before it can be used by consumers, which is why refining costs are factored into the price of gas.

The U.S. has hundreds of refineries across the country. The country’s largest refinery, owned by the Saudi Arabian company ​​Saudi Aramco, processes around 607,000 barrels of oil per day.

The exact cost of refining varies, depending on a number of factors such as the type of crude oil used, the processing technology available at the refinery, and the gasoline requirements in specific parts of the country.

In general, refining capacity in the U.S. has not been keeping up with oil demand. Several refineries shut down throughout the pandemic, but even before COVID-19, refining capacity in the U.S. was lagging behind demand. Incredibly, there haven’t been any brand-new refining facilities built in the country since 1977.

Taxes

In the U.S., taxes also play a critical role in determining the price of gas.

Across America, the average gasoline tax is $0.57 per gallon, however, the exact amount fluctuates from state to state. Here’s a look at the top five states with the highest gas taxes:

RankStateGas tax (per gallon)
1California$0.87
2Illinois$0.78
3Pennsylvania$0.77
4Hawaii$0.77
5New Jersey$0.69

*Note: figures include both state and federal tax

States with high gas taxes usually spend the extra money on improvements to their infrastructure or local transportation. For instance, Illinois doubled its gas taxes in 2019 as part of a $45 billion infrastructure plan.

California, the state with the highest tax on gas, is expecting to see a rate increase this July, which will drive gas prices up by around three cents per gallon.

Distribution and Marketing Costs

Lastly, the costs of distribution and marketing have an impact on the price of gas.

Gasoline is typically shipped from refineries to local terminals via pipelines. From there, the gasoline is processed further to ensure it meets market requirements or local government standards.

Gas stations then distribute the final product to the consumer. The cost of running a gas station varies—some gas stations are owned and operated by brand-name refineries like Chevron, while others are smaller-scale operations owned by independent merchants.

The big-name brands run a lot of advertisements. According to Morning Consult, Chevron, BP PLC, Exxon Mobil Corp., and Royal Dutch Shell PLC aired TV advertisements in the U.S. more than 44,495 times between June 1, 2020, and Aug. 31, 2021.

How Does the Russia-Ukraine Conflict Impact U.S. Gas Prices?

If only a fraction of America’s oil comes from Russia, why is the Russia-Ukraine conflict impacting prices in the U.S.?

Because oil is bought and sold on a global commodities market. So, when countries imposed sanctions on Russian oil, that put a squeeze on global supply, which ultimately drove up prices.

This supply shock could keep prices high for a while unless the U.S. falls into a recession, which is a growing possibility based on how recent data is trending.

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