Trade Britain is doubling down, as other economies rebalance their trade. Why the UK’s trade profile has lurched in the opposite direction to almost everyone else. 23 June 2026 by Stephen Hunsaker Stephen Hunsaker This was first published on our Substack. Every country has a handful of things it is unusually good at selling to the rest of the world. Germany sells cars and machinery; France sells wine, aircraft and luxury goods; the UK sells financial, legal and consulting services. In other words, the sectors where they punch above their weight in world markets – economists call this “comparative advantage”. These advantages usually shift slowly. A country’s strengths today are a good indicator of its strengths even decades ago. Wholesale swings, where a nation that mostly exports goods becomes one that mostly exports services (or vice versa) don’t happen very often. Strengths, in other words, are sticky. Which is what makes the past five years so unusual for the UK. Not only has its trade profile moved a lot, but it’s moved in the opposite direction to its peers. And the sectors we are quietly walking away from are, concerningly, many of the sectors the Government has built its Industrial Strategy around. Going its own way The chart below boils each country down to a single number that captures whether its exports became more specialised or more balanced in recent years. A score above one means its strong sectors got stronger and its weak ones got weaker – it doubled down. A score below one means the opposite: strong and weak evened out as the country hedged its bets. France, Germany and the United States all sit at or below one, in the bet-hedging zone. They have been gradually reshaping their export profiles, easing off established strengths and letting weaker sectors catch up. The UK sits highest of all 19 advanced economies we looked at, on both a five- and a ten-year view. Where others rebalanced, Britain leaned in. All bets are off. While its peers reshape their export profiles, the UK is doubling down on its existing strengths What Britain is leaning into So, which basket are we placing all our eggs in? In practice, “doubling down” mostly means the long march from goods to services. Services jumped from 48 to 56 per cent of UK exports between 2019 and 2024 (and rose again to 59 per cent in 2025). And some of the doubling down is exactly where you would want it, and not just in services. Aerospace propulsion is the standout: accounting for roughly £36 billion of the UK’s advanced manufacturing exports and in which the UK supplies more than a quarter of the world’s reaction engines – a lead that widened over the past five years. Britain remains formidable at the high-tech, hard-to-copy end of manufacturing. And what’s slipping The trouble is what is being left behind. Some once-staple strengths have disappeared outright in the past five years: revealed comparative advantage has gone in road vehicles and chemical materials and products. And the UK is also losing ground in a number of fast-growing products that sit at the heart of its Industrial Strategy. In pharmaceuticals, exports of finished medicines flatlined while the world market surged, leaving them some £5.6 billion below what holding the UK’s 2019 share would have delivered. Britain’s share of the world market for microchips roughly halved, from 0.67 to 0.33 per cent. Its share of shipbuilding more than halved, from 10.3 to 4.8 per cent. Backing the right horses None of this means Britain is getting it wrong. Leaning into genuine strengths is a sensible economic strategy. But it raises the stakes on the goods the country has decided still matter and where the UK’s advantage is eroding. Since 2019, three in four UK goods lines have seen the UK lose market share. The honest task now is to triage: defend the sectors pulling ahead, like aerospace; fight for a select few of those still in play, like pharmaceuticals; and be clear-eyed about those, like microchips, where the race may already be run. Doubling down is a bet and it pays to think carefully about which horses you are backing. Stephen Hunsaker is an Economist at the Resolution Foundation. You can follow him on BlueSky to stay up to date with his analysis. Read ‘Leaving EU behind’ to learn more about how Britain lost its trading edge and whether Brexit is to blame.
