Read the source article by The International Trade Administration (ITA) here.
Despite the U.K.’s relatively small land mass (roughly the size of Oregon), it’s home to more than 65 million people. With a $2.6 trillion GDP (2018), it’s also the world’s fifth largest economy, the second largest destination for foreign investors, and a major trading partner with many countries, including the U.S. Let’s look at some of the key reasons why so many U.S. firms choose to export there, and explore the potential for your business to do the same.
Why export to the UK?
The U.K. government strongly supports trade liberalization, and U.S. exports of goods and services to the country are around $140.8 billion a year (2018) – from sectors like Aerospace, Medical Equipment, Smart Grids, Sustainable Construction, and Travel & Tourism. The U.K.’s open borders with the EU serve as a gateway for thousands of U.S. exporters, and these businesses can also gain better access to markets further afield including the Middle East and Africa. Overall, Britain is a very friendly place to do business, and zero restrictions on capital transfers or profit repatriation might just be the icing on the cake.
The U.K. government runs programs designed to attract foreign investment, and these can be useful places to form relationships with British trading partners. In fact, the trading relationship between the U.K. and the U.S. is the world’s largest, valued at over $1.2 trillion in 2016 – with around 1 million jobs being created in each country as a result.
Shared language and culture
Around 4-5 million people from the U.K. visit America each year, contributing over $12 billion to the economy. The shared culture, language and respect between the two countries means American businesses find trading in the U.K an easy and relatively seamless experience.
The U.K. is Europe’s biggest market for U.S. goods – and fifth globally. It’s also the largest market in the world for U.S. services, and more than 40,000 U.S. companies already sell here – particularly from the aerospace, agricultural, biomass, cyber security, and medical equipment sectors.
Overall, the U.K. is a highly sophisticated market with strong demand for cutting edge consumer goods. So, if your product or service is innovative and new, there’s a good chance it will succeed there.
A few things to bear in mind
The U.K. and U.S. share common ground in everything from language to legal systems, but there are differences to be aware of.
You’ll need to ensure your product has been localized (for example, any wording on the packaging) – and check it meets any relevant U.K. regulations and laws.
The way people choose and use products can also be a little different to the U.S. Do your research first, and get into the mindset of your shoppers so you understand what really makes them tick.
The June 23 2016 referendum result means the U.K. will eventually leave the E.U. – and there are concerns around whether it will keep its duty free access to E.U. markets. While originally Britain was meant to leave on March 29 2019, the actual departure date has since been delayed, and is now set for October 31, 2019.
This ongoing uncertainty has had implications for the economy there. Overall, it grew by 1.4% in 2018 which was a slight decrease from previous years, and some observers expect the economy to weaken again in the event of a ‘no deal’ Brexit – due to a drop in consumer confidence, rising inflation and potential currency fluctuations.
Yet despite all this, the U.K. remains a key market for U.S. goods and services and a major destination for U.S. foreign investment.
For more information and advice, explore the country commercial guides on export.gov, or contact the U.S. Commercial Service.