US and UK Seal Trade Deal While Steel Dispute Remains

Tuesday 17 June 2025 - 11:34

By: Zahouani Ilham

US and UK Seal Trade Deal While Steel Dispute Remains

KANANASKIS, Alberta — On the sidelines of the G7 Summit in Canada, U.S. President Donald Trump and UK Prime Minister Keir Starmer announced the signing of a new trade agreement aimed at easing certain tariffs between the two nations. The deal marks a step forward in efforts to finalize a comprehensive trade pact, though critical issues such as steel and aluminum tariffs remain unresolved.

The agreement confirms existing quotas and tariff levels for British car exports and removes tariffs on UK aerospace products, including aircraft and related components. However, industries like pharmaceuticals were notably left out of this phase.

President Trump praised the bilateral relationship, calling it “fantastic,” though he initially misstated the agreement as being with the European Union before correcting himself. Starmer hailed the development as a sign of strong collaboration between the U.S. and the UK.

According to a White House executive order, the U.S. plans to set a quota for UK steel and aluminum imports that would exempt them from the standard 25% tariff, pending proof from the UK regarding the security and integrity of its supply chains and production. U.S. Commerce Secretary Howard Lutnick will determine the exact quota levels.

Earlier this month, the UK narrowly avoided facing U.S. tariffs of up to 50% on steel and aluminum. Without the current deal, new tariffs could have been imposed starting July 9.

Under the agreement, British carmakers will be allowed to export up to 100,000 vehicles annually to the U.S. at a reduced 10% tariff significantly lower than the 25% levied on other countries. This provision is set to take effect seven days after being published in the Federal Register.

This marks the first formal agreement of its kind between the U.S. and another country under Trump's administration, benefiting key UK sectors like aerospace and automotive. The UK will also reduce tariffs on American products such as beef and ethanol.

Though hailed as a major win by London, the implementation process continues, with several technical issues still under negotiation. UK Trade Secretary Jonathan Reynolds emphasized the deal’s swift rollout and promised that further trade advancements would follow.