How successful is European integration in removing non-tariff trade barriers? We study how Brexit affected UK firms' input sourcing and sales. The post-Brexit Trade and Cooperation Agreement (TCA) reduced sales and input expenditure at firms with higher pre-Brexit EU trade exposure. It also caused firms to switch towards domestic and non-EU inputs. Through the lens of a trade model, the switch in input sourcing implies the TCA increased trade costs on EU imports by 21% and raised unit production costs by 3:1% for the average UK importer. Our results indicate EU membership secures large reductions in trade costs.

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30 September 2026     Paper Number CEPDP2220

Download PDF - Quantifying non-tariff barriers: Brexit, input sourcing and firm performance

This CEP discussion paper is published under the centre's Trade programme.