Abstract:
The current COVID-19 crisis has shown the importance of supply chain diversification to mitigate the negative effect of unexpected supply shocks. The decision of the United Kingdom to leave the European Union poses additional challenges to foreign trade: Irrespective of the outcome of the Brexit negotiation, trade costs between the UK and the EU will increase as a response to Brexit and cause disruptions in trade relations. Trade shocks hitting one bilateral country pair might be more severe for goods that are highly dependent on few suppliers, as they cause an increase in costs and, in the worst case, supply chain disruptions. This report takes a detailed look at goods that are dependent on few suppliers and shows that few products are imported solely from the UK, representing a negligible share of imports.