Brexit - Understanding the trade risks for your organisation

Our Brexit Trade Risk Diagnostic

Why think about trade risk?

The UK’s role as a trading nation is going to change significantly as we exit the EU.  Are you ready?

Understanding how your business will be impacted and the level of associated risk and opportunity will be critical to being able to manage the changes and ensure the best possible outcome for your business in the new trading environment.  

Brexit will impact on all businesses, and most affected will include those that: 

  • Sell or buy high volumes of goods or services to/from the EU
  • Have highly integrated UK-EU supply chains, particularly those that operate 'just in time production'
  • Are heavily reliant on the EU for staff – whether temporary or permanent
  • Operate in highly regulated areas, whether services (e.g. financial, legal) or goods (e.g. chemicals, pharma)
  • Have complicated EU and international supply chains
  • Sell goods or services to one of the 50+ countries with which the EU has a Free Trade Agreement (FTAs)
  • Buy goods or services from one of the 50+ countries country with which the EU has a FTA
  • Benefit from EU Research and Development (R&D) grants and other funds
  • Invest in UK based assets

It is vital that businesses act now to assess their exposure to Brexit risks against well-informed scenarios, and put in place and implement mitigation plans to reduce risks and seize the opportunities.

Our approach

Our diagnostic framework maps the trade risk areas that will change under our new relationship with the EU and the rest of the world including through any new trade agreement, customs arrangements and mutual recognition agreements with the EU or 3rd party countries.

We have identified 16 dimensions within three overarching categories that will be impacted, and will create uncertainty to trading businesses. Not all of these will be relevant to all businesses but represent the ‘checklist’ that they should understand for their sector and current operating model.

The framework has been developed by trade policy specialists with experience of negotiating and enforcing trade deals, and implementing trade and customs regimes in other countries.

Our approach diagnostic framework

How well do you understand the impact…

  • What proportion of your sales and purchases are with counterparties in the EU and what product/service categories are they covered under?
  • How much will increases in duty between the UK and EU cost you under the different Brexit negotiation outcomes?
  • What is the size and number of your shipping consignments and how could your customs administration costs be impacted?
  • What is the potential cost of additional border delays in time, working capital and operational difficulties?
  • What is the potential cash flow impact of the loss of VAT relief?
  • Are you trading with suppliers or customers in countries who currently have a trade agreement with the EU?
  • Are your products currently tested or certified against EU standards?
  • Do you need movement of data between the UK/EU to provide your products or services?

Working with us

Our trade risk experts will work with you to identify which of these dimensions will most affect your business, how they affect it, their likelihood and impact, and produce a Brexit trade risk assessment report for your organisation.

We draw on deep specialist expertise across the firm, to further analyse risks and develop and implement mitigation strategies.

Our diagnostic will be grounded in the potential scenarios for the end of the Article 50 negotiations and beyond. A key element of our work will be helping you explore what each of these scenarios could mean for you and your business.

Our work with clients is enabling them to embrace the current uncertainty, plan for a range of scenarios and gain clarity on where the impact of Brexit lies for their organisation and their priorities for the future. For many of our clients, the frameworks we provide are enabling them to make critical decisions now - about investments, location or supply chain - to safeguard their future success.

By opening a dialogue between our clients from all industries, we have started to foster collaboration between government and business, a relationship we believe is critical to our success as a nation as we embark on this new chapter in our trading history.

We are delivering our trade risk diagnostic as part of a number of services to clients, including through Internal Audit, Due Diligence on Deals and portfolio risk assessments.

Contact us

Phil Brown

Phil Brown

Senior Trade Adviser, PwC United Kingdom

Tel: +44 (0)7432 340942

Matthew Paul Clark

Matthew Paul Clark

Head of UK Customs, Excise & International Trade Team, PwC United Kingdom

Tel: +44 (0)7718 339388

Follow us