Trade Uncertainty Holds Back UK-German Business Investment
Cross-border firms are pausing investments as they await simplified customs, border procedures, and service market access.
Updated on Oct. 15, 2026 in International Trade
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A survey of firms operating between the UK and Germany highlights significant dissatisfaction with current trade conditions, as trade volume has dropped 7 percent over the last decade. Many businesses are now pausing capital expenditure due to lingering political uncertainty and regulatory friction.
Why it matters
Business operators face a volatile environment where 61 percent of firms are currently withholding investment in the UK. This hesitation stems from persistent administrative hurdles and a lack of clear, unified trade standards that complicate cross-border operations.
Trade volume between Germany and the UK fell 7 percent to 118.4 billion euros between 2015 and 2025. Meanwhile, 35 percent of surveyed companies cite political uncertainty as the primary barrier to new investment.
The players
KPMG
A global audit and professional services network that provides tax, advisory, and consulting services to multinational corporations.
British Chamber of Commerce in Germany
An industry association representing the interests of companies engaged in bilateral trade between the UK and Germany.
The details
Companies are calling for streamlined customs procedures and increased mobility for employees to offset the current friction in EU-UK trade relations. With 73 percent of firms demanding reduced bureaucracy from German regulators and 32 percent seeking mutual recognition of product standards, operational costs for cross-border logistics remain high. These demands underscore a need for a modernized framework to improve the ease of doing business under the existing Trade and Cooperation Agreement.
Timeline
2015-2025: Trade volume between Germany and the UK declined 7 percent.
2021: The Trade and Cooperation Agreement between the EU and the UK took effect.
October 9, 2026: Survey results were publicly released.
November 20, 2026: British government and EU officials are scheduled to meet in Brussels.
Market Landscape
This survey evaluates the operational impact of the EU-UK Trade and Cooperation Agreement, which has governed cross-border commerce since 2021. The results reflect ongoing industry friction as stakeholders wait for the next scheduled review of the treaty.
Operators should prepare for sustained administrative complexity while awaiting potential policy shifts from the November EU summit. Managers should prioritize documenting cross-border friction as evidence for contingency planning if current service market access remains restricted.
The takeaway
Companies are increasingly favoring capital conservation over expansion due to current trade barriers and bureaucratic friction. Monitor the November EU summit outcomes closely to identify if upcoming policy changes will alleviate the 49 percent demand for more efficient customs and border procedures.
What happens next
Business leaders should track outcomes from the upcoming summit between the British government and the EU scheduled for November 20, 2026, as this meeting may yield new directives on customs and border procedures.
Further reading
For more on evolving regulatory requirements, visit International Trade.
Source note: This article includes information reported by dpa International.
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