US president Donald Trump and British prime minister Keir Starmer said Monday that they had signed a trade deal that will slash tariffs on UK auto and aerospace industry imports — but they are still discussing how to handle steel production.
"We just signed it, and it's done," Trump said, as the pair spoke to reporters at the Group of Seven summit (G7) in the Canadian Rockies, with the US president brandishing the pages of what he said was a long-awaited agreement.
The rollout was anything but smooth, however, as Trump dropped the papers and said at first that his administration had reached an agreement with the European Union when he meant the United Kingdom.
The president said that the pact is "a fair deal for both" and would "produce a lot of jobs, a lot of income."
British prime minister, Keir Starmer, said it meant "a very good day for both our countries, a real sign of strength."
Reaching this agreement is a significant step as Trump has threatened much of the world with steep import tariffs that have unsettled markets and raised the possibility of a global trade war.
He has since backed off on many of his proposed levies but also continued to suggest that administration officials were furiously negotiating new trade pacts with dozens of countries — even if few have yet to materialise.
Trump said, "the UK is very well protected" from tariffs. "You know why? Because I like them."
What the deal is all about
The signing of the deal at the G7 followed Trump and Starmer's announcement in May that they'd reached a framework for a trade pact that would slash US import taxes on British cars, steel and aluminium in return for greater access to the British market for US products, including beef and ethanol.
But Monday's agreement fully covers only British cars and aerospace materials, with more work to come on steel.
The British government said the new agreement removes US tariffs on UK aerospace products, exempting Britain from a 10% levy the Trump White House has sought to impose on all other countries — a boost to British firms, including engine-maker Rolls-Royce.
It also sets the tax on British autos at 10% from the end of the month, down from the current 27.5%, up to a quota of 100,000 vehicles a year.
UK Business and Trade Secretary Jonathan Reynolds said 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, said it was "great news for the UK automotive industry."
Steel and pharmaceuticals are still on the table
There was no final agreement to cut the tax on British steel to zero as originally anticipated — seen as vital to preserving the UK's beleaguered steel industry. Britain's steel output has fallen 80% since the late 1960s due to high costs and the rapid growth of cheaper Chinese production.
After the two leaders spoke, the White House released a statement seeking to clarify matters, saying that with respect to steel and aluminium, Commerce Secretary Howard Lutnick will "determine a quota of products that can enter the United States without being subject" to previous tariffs imposed by the Trump administration.
The British government said Monday that the plan was still for "0% tariffs on core steel products as agreed."
Trump's executive order authorising the deal contained several references to the security of supply chains, reflecting the US administration's concerns about China. It said the UK "committed to working to meet American requirements on the security of the supply chains of steel and aluminium products intended for export to the United States."
There was also no final deal on pharmaceuticals, where "work will continue," the UK said.
The deal signed Monday also confirms that American farmers can export 13,000 metric tons (29 million pounds) of beef to the UK each year, and vice versa — though a British ban on hormone-treated beef remains in place.
