Much has been made of Brexit’s impact on British exports, but ‘Made in Britain’ relies heavily on our ability to import. Almost half of the UK’s £736bn imports are goods that make up part of a final product, and nearly half those so-called ‘intermediary goods’ come from the EU.
This is already having an impact on supply chains. Mckinsey interviewed 50 UK executives whose companies make everything from face creams to fenders to fettuccine, and found deep concern about the near-term uncertainty and impact of Brexit.
Food manufacturers worry that their goods will spoil while being held up at borders, and almost everyone is grappling with the uncertainty of higher tax duties if the UK leaves the EU and reverts to most-favoured nation status under WTO rules. It’s not just UK and EU products that are affected, however, many intermediary products that come to the UK are from countries that have a free trade agreement with the EU.