The United Kingdom, with a population of 67 million people and a GDP of $3.1 trillion (2022), is a major international trading power. Though geographically small (the United Kingdom is roughly about the size of Oregon), it has the second-largest economy in Europe and led the G7 in GDP growth (4.0%) in 2022.
Despite continuing to face regulatory challenges posed by the effects of the UK’s exit from the European Union (“Brexit”), high inflation driven by rising energy prices, and the lingering effects of the COVID-19 pandemic, the UK remains a critical market for American exports of goods and services. U.S. exports of goods and services to the UK reached $157.1 billion in 2022, up 21.5 percent from 2021, ranking the UK in 5th place among export destinations for American goods and placing it in the 2nd spot for trading in services.
Major categories of U.S. exports include financial and professional services, industrial supplies, agricultural products, cyber security and other IT, medical equipment, consumer goods, smart grids, and travel & tourism.
The U.S.-UK investment relationship is the largest in the world, with cumulative bilateral stock in direct investment valued at more than $1.5 trillion in 2021. In 2021, the U.S. direct investment position in the United Kingdom (outward) topped $1 trillion, an increase of 9.5% from 2020. The direct investment position from the United Kingdom to the United States (inward) was $565.2 billion, an increase of 22% from 2020. More than 2.6 million jobs, 1.46 in the UK and 1.17 million in the United States, are directly supported by these investments.
There are 7,500 U.S. firms of all sizes with a presence in the United Kingdom, which is also the top location in Europe for U.S. firms to base regional headquarters that cover Europe, the Middle East, and Africa. According to one recent survey, however, U.S. investment confidence in the UK has declined for the third consecutive year, in large part due to lingering uncertainty and challenges to the UK-EU trade relationship post-Brexit, but also due to policy uncertainty, relative political instability, immigration, high inflation, and labor shortages.
Before the COVID-19 pandemic, the UK ranked third in overall number of travelers arriving to the United States (behind Canada and Mexico, respectively), making the UK the number one overseas market for travel to the United States, with four to five million UK travelers visiting the United States each year and contributing over $12 billion to the American economy annually. Although 2020 and 2021 saw a dramatic decline in tourism to the United States due to COVID-related travel restrictions, since restrictions were lifted in June 2022 transAtlantic travel has rebounded.
Visit State Department’s website for background on the country’s political and economic environment: