President Donald Trump and British Prime Minister Keir Starmer announced Monday that they have signed a trade agreement aimed at reducing tariffs on imports from the U.K.’s auto and aerospace industries, though negotiations are still ongoing regarding steel production.
The leaders spoke to reporters at the Group of Seven summit in the Canadian Rockies, where Trump held up what he described as the long-anticipated deal. The rollout, however, was somewhat bumpy—Trump mistakenly referred to an agreement with the European Union before correcting himself to say he meant the United Kingdom.
The president nonetheless insisted the pact is “a fair deal for both” and would “produce a lot of jobs, a lot of income.” He added, “We just signed it and it’s done.”
Starmer added that it meant “a very good day for both our countries, a real sign of strength.”
Reaching the agreement is notable, given that Trump has previously threatened numerous countries with steep import tariffs, the Associated Press reported.
While Trump has since scaled back many of those proposed tariffs, he continues to note that his administration is actively negotiating new trade deals with dozens of nations, even though only a few have come to fruition so far.
Trump said, “The U.K. is very well protected from tariffs. You know why? Because I like them.”
The deal signed at the G7 summit follows Trump’s and Starmer’s May announcement that they had reached a framework for a trade agreement aimed at cutting U.S. import taxes on British cars, steel, and aluminum. In exchange, the U.S. would gain greater access to the U.K. market for products like beef and ethanol.
However, Monday’s finalized agreement fully addresses only British automobiles and aerospace materials, with negotiations on steel still ongoing.
The British government said the deal eliminates U.S. tariffs on U.K. aerospace products, sparing Britain from a 10% levy the Trump administration has applied to other countries. The exemption is expected to benefit British companies, including engine manufacturer Rolls-Royce, the AP noted.
It sets the tax on British automobiles at 10%, reduced from the current 27.5%, applicable up to a quota of 100,000 vehicles per year, said the report.
U.K. Business and Trade Secretary Jonathan Reynolds noted the deal protects “jobs and livelihoods in some of our most vital sectors.” Mike Hawes, chief executive of Britain’s Society of Motor Manufacturers and Traders, added that the deal was “great news for the U.K. automotive industry.”
However, the agreement fell short of eliminating tariffs on British steel as originally envisioned, a move considered crucial for supporting the U.K.’s struggling steel industry. British steel production has declined by 80 percent since the late 1960s, driven by high operating costs and the rapid expansion of cheap Chinese steel.
Monday’s deal builds on the framework announced in May, which had not yet taken effect. Until now, British businesses remained uncertain about whether they might face unexpected tariff increases from the Trump administration.
After the announcement by the U.S. and UK leaders, the White House issued a statement seeking to clarify the agreement, noting that regarding steel and aluminum, Commerce Secretary Howard Lutnick would “determine a quota of products that can enter the United States without being subject” to earlier tariffs imposed by the administration.
The British government also said on Monday that the plan was still for “0% tariffs on core steel products as agreed.”
Trump’s executive order that authorized the deal included multiple references to the security of supply chains, reflecting the concerns of the U.S. administration regarding China. It said the U.K. “committed to working to meet American requirements on the security of the supply chains of steel and aluminum products intended for export to the United States.”
Also, the two sides have yet to make a deal on pharmaceuticals, with the UK noting that “work will continue” on the issue.
