More than half of British companies are struggling to expand their sales in Europe, with trade tensions worsening despite the UK-EU trade deal, according to a new study by the British Chambers of Commerce.
A BCC survey found that 54 percent of exporters believe the Trade and Cooperation Agreement (TCA) has not helped them increase sales in the UK’s largest overseas market, up 13 percentage points on the previous year. The findings underline growing concerns that Brexit hurdles are becoming more restrictive over time, rather than easing.
The findings come as Prime Minister Keir Starmer seeks a much-hyped “reset” of the UK’s trading relationship with Brussels. But business groups warn that progress is too slow and that unresolved bureaucratic hurdles continue to weigh heavily on exporters.
Only 16 percent of companies surveyed said the EU deal had helped them increase their sales, while almost none felt government support in dealing with post-Brexit trading rules had been comprehensive. The BCC surveyed 989 companies, 96 percent of which were small and medium-sized companies.
Companies cited ongoing customs bureaucracy, VAT complexity and restrictions on staff mobility as the main obstacles to selling to the EU. Issues related to sanitary and phytosanitary controls (SPS) affecting food, beverage and agricultural exporters have also been cited as a major cause of tension.
The BCC has called on ministers to prioritize practical reforms in 2026, including closer cooperation with the EU on VAT, simplified customs procedures and a deeper SPS agreement to reduce paperwork and delays at borders.
It also warned of delays in scrapping the de minimis import exemption, which allows foreign sellers to ship low-value goods to the UK without paying customs duties. Chancellor Rachel Reeves has signaled the loophole will be closed but not before 2029, a timeline that business groups say exposes British retailers to unfair competition from foreign e-commerce platforms.
Steve Lynch, director of international trade at the BCC, said: “The problems with trade tensions appear to be getting worse, not better. In the face of a budget that failed to deliver significant growth or trade support, the right reorientation of the EU is now a strategic imperative, not a political choice.”
“Companies want clarity, certainty and rapid implementation in 2026, as well as a clear vision of how trade with Europe will actually improve.”
The results come amid a wider political debate over whether Labor should go further in restoring ties with the EU. While Starmer has ruled out re-joining the customs union, senior party figures have suggested closer alignment could become a campaign issue in the future.
There are initial signs that the general business climate is stabilizing. Lloyds Bank’s business confidence index rose to a four-month high in December, while consumer confidence also rose slightly after months of uncertainty ahead of the Budget.
But exporters say optimism at home will do little to boost growth in Europe without a noticeable reduction in trade barriers.
A government spokesman said ministers were making “strong progress” in negotiations with the EU, including a commitment to conclude a food and drinks deal and link emissions trading schemes between the UK and the EU. These measures could bring almost £9 billion a year to the economy by 2040.
Many exporters remain unconvinced for now, warning that Europe will remain a growth opportunity largely out of reach for British businesses unless trade tensions ease quickly.
