The United States and the United Kingdom have reached a new trade agreement to reduce tariffs on important sectors, but unresolved disputes about steel and pharmaceuticals remain. US President Donald Trump and UK Prime Minister Keir Starmer announced the agreement during the G7 Summit in the Canadian Rockies, calling it a watershed moment in bilateral trade relations.
Trump described the deal as a “fair agreement” that will create employment and revenue. Starmer described the deal as a demonstration of strength between the two countries.
Despite the declaration, there was some small confusion when Trump referred to the European Union rather than the United Kingdom. The agreement immediately eliminates a 10% duty on UK aerospace exports to the US and decreases the tariff on UK-manufactured cars from 27.5% to 10%, subject to an annual quota of 100,000 vehicles.
However, no definitive agreement was achieved on British Steel, an industry severely damaged by global competition. The US Commerce Secretary is anticipated to set tariff-free quotas for British steel and aluminium imports. Pharmaceutical talks also remain ongoing.
The British government maintained its intention to pursue 0% tariffs on essential steel products.
