According to Reuters, Britain will lose its status as one of Germany's top 10 trading partners in 2021 for the first time since 1950 as Brexit-related trade barriers drive German companies to look elsewhere for business.

German imports of goods from Britain fell nearly 11 percent year-on-year to 16.1 billion euros in the first six months of 2021, according to federal Statistics office data reviewed by Reuters.

While German goods exports to the UK rose 2.6 per cent to €32.1bn, overall bilateral trade fell 2.3 per cent to €48.2bn, pushing the UK down from ninth to 11th place in the league table of Germany's trading partners. Before the brexit vote in 2016, the UK was Germany's fifth largest trading partner.

According to a Survey by the German Foreign Trade Association (BGA) in December 2020, one in five Companies in Germany is adjusting their supply chains by switching from British suppliers to those from other EU countries.

Michael Schmidt, president of the British Chamber of Commerce in Germany, said the trend was becoming more pronounced, although UK companies were worse off and were unlikely to see any improvement until the end of 2021.

He told Reuters that "more and more small and medium-sized businesses are winding up their operations [in the UK] because of these [Brexit-related] obstacles."

The sharp drop in bilateral trade in the first half of 2021 was also attributed to companies bringing forward related business ahead of new barriers such as customs controls that took effect in January.

"A lot of companies foresaw these problems... Therefore, we decided to increase the inventory by importing the goods earlier.

While such operations boosted bilateral trade in the fourth quarter of 2020, they reduced demand in early 2021, while new customs inspection issues have complicated trade since January.

"Many small businesses simply can't afford the additional costs of keeping up with and complying with all the latest customs rules, such as health certificates for cheese and other fresh products," Schmidt said.