The United States and United Kingdom have taken a stride in their economic partnership, launching a new trade arrangement that aims to ease barriers for key industries.
The announcement was made by U.S. President Donald Trump and British Prime Minister Keir Starmer on the margins of the G7 Summit in Canada, and has been welcomed as a sign of deepening ties between the two countries. However, the fate of British steel and aluminium exports to the U.S. remains unresolved, leaving a critical sector in a state of uncertainty.
The newly signed agreement provides substantial benefits for British automotive and aerospace manufacturers. Under the terms, UK carmakers will be able to export up to 100,000 vehicles to the U.S. each year at a preferential tariff rate of 10%, a notable reduction compared to the 25% rate imposed on most other countries.
In addition, tariffs on British aerospace products, including aircraft and components, will be eliminated, offering a boost to major UK companies such as Rolls-Royce and BAE Systems. The White House indicated that these measures will take effect within a week of their publication in the Federal Register.
Despite these advances, the issue of tariffs on steel and aluminium remains a sticking point. The U.S. has proposed a quota system that would allow certain volumes of British steel and aluminium to enter the American market without incurring the standard 25% tariffs. However, this exemption is contingent on the UK providing assurances about the security and reliability of its supply chains. The precise quota will be determined by Commerce Secretary Howard Lutnick, as outlined in a White House executive order.
This ongoing uncertainty has caused concern within the UK steel industry, which employs tens of thousands and is a cornerstone of British manufacturing. Earlier in June, the U.S. imposed steep tariffs on steel and aluminium from several countries, raising fears of similar measures being applied to British producers if an agreement is not finalised.
The agreement does not cover all sectors. Pharmaceuticals, a major British export, were notably absent from the deal’s provisions. Both governments have indicated that further discussions will continue, with hopes of securing more favourable terms for British pharmaceutical companies in future negotiations.
Prime Minister Starmer described the day as “a very good day for both of our countries, a real sign of strength.” President Trump, meanwhile, characterised the relationship with Britain as “fantastic,” and, after briefly waving and dropping the signed document, declared, “We signed it and it’s done,” before clarifying that the deal was with Britain and not the European Union.
“Bringing trade deals into force can take several months, yet we are delivering on the first set of agreements in a matter of weeks. And we won’t stop there,” UK Trade Secretary Jonathan Reynolds stated.
Reynolds also pointed to a new arrangement allowing reciprocal access to 13,000 metric tonnes of beef, with the stipulation that American imports must adhere to strict UK food safety standards. He reiterated that both countries are focused on achieving “significantly preferential outcomes” for the UK pharmaceutical sector and are working to shield the industry from any additional tariffs that might arise from ongoing U.S. trade investigations.
The British government has hailed the deal as a major victory for the country’s automotive and aerospace sectors, emphasising that the UK is the only nation so far to have secured such terms with Washington. Nevertheless, the unresolved steel and aluminium issue means that further negotiations are inevitable.
When asked whether the agreement would protect the UK from future tariff threats, President Trump replied, “The UK is very well protected. You know why? Because I like them. That’s their ultimate protection.”