Using monthly bilateral trade data from 100 countries at HS 6-digit product level (January 2017 to October 2025) and synthetic difference-in-differences methods, we estimate a 53.8% decline in UK export product varieties to the EU and a 31.5% decline in import varieties relative to their counterfactual levels, while export values fell by an estimated 16.5% and import values by 23.1%.
In value terms, the estimated effects have stabilised — export values fell by 17% at three years and 16.5% at five, import values by 23% and 23.1% (Du, Liu, Shepotylo and Shi 2024) — but negative effects on product varieties continue to deepen through 2025, with no sign of recovery.
These aggregate estimates, however, mask wide variation across sectors: some product categories have lost the majority of their trade relationships while others have barely been affected. Explaining that variation is this paper’s central contribution.
An in-depth, two-stage analysis of the estimated effects across 2,673 country-product cells shows that, on the export side, product characteristics explain 37% of the variation in value effects while country identity explains just 3%.
Research Paper - Supply Chain Lock-in and the Selective Destruction of EU-UK Trade
Jun Du is Professor of Economics at Aston Business School, Aston University, and Founding Director of Centre for Business Prosperity. Jun also leads research on Internationalisation in Enterprise Research Centre. She is an expert on internationalization, innovation and productivity and serves on the Economic and Social Research Council Grant Assessment Panel for Economics and Management and is a member of the Council of Experts for the Innovation and Research Caucus. Jun is on the advisory board of British Chamber of Commerce Global Britain Challenge Group, Business Commission West Midlands Advisory Panel and WMGC internationalisation Strategy steering group, and the Midlands Engine Observatory Program Board.
Oleksandr Shepotylo is an Associate Professor at Aston Business School. He received his PhD in Economics from the University of Maryland, College Park, his Master in Economics from New Economic School. He previously worked at the World Bank, DEC RG Trade group, Kyiv School of Economics, Higher School of Economics, and the University of Bradford.
Oleksandr’s main research interests are in international trade, trade policy, and globalization. He has worked in a variety of topics such as the impact of trade liberalization on exports and productivity and the use of the structural gravity model to evaluate the gains from trade. He has extensive experience measuring and quantifying non-tariff measures and analysing trade policy impacts, advising governments about the effects of trade policy decisions in developing economies; more than 15 years of professional experience in statistical analysis of trade, both of WTO accession and regional trade agreements.
ESRC UKRI Smart Data Fellow and Research Fellow at Aston Business School. She received her PhD in Economics from the University of Liverpool. Yujie's main research interests are in international trade, trade policy and global supply chain. She has extensive experience measuring and quantifying non-tariff measures and analysing trade policy impacts.
