US, UK Announce Major Bilateral Trade Deal at G7 Summit

The United States and the United Kingdom have signed a new bilateral trade agreement, announced during the G7 summit in Kananaskis, Alberta.

The deal, unveiled by U.S. President Donald Trump and U.K. Prime Minister Keir Starmer, includes significant tariff reductions in key sectors such as automotive, aerospace, and agriculture, while negotiations continue in other areas including steel and pharmaceuticals.

Under the terms of the agreement, U.S. tariffs on U.K. automotive exports will be reduced from 27.5% to 10%, with an annual cap of 100,000 vehicles.

This change, expected to take effect before the end of June, is seen as a major win for the U.K.’s automotive industry and is projected to protect thousands of jobs.

In the aerospace sector, the United States has agreed to eliminate the 10% tariff on U.K. exports. The move is expected to benefit major British companies such as Rolls-Royce and BAE Systems, facilitating easier access to the U.S. market.

The agreement also addresses agricultural trade. The U.K. will permit imports of up to 13,000 metric tons of hormone-free U.S. beef, in line with British food safety standards.

Additionally, tariff-free quotas have been established for U.S. ethanol, enhancing opportunities for American agricultural producers. In return, British food exporters are expected to gain increased access to the American market.

However, the deal does not resolve all outstanding trade issues. U.S. tariffs on U.K. steel and aluminum remain at 25%, with discussions ongoing regarding a possible quota-based arrangement. Commerce Secretary Howard Lutnick indicated that further announcements on the issue would be made in the coming weeks.

Similarly, negotiations continue on pharmaceutical trade, with regulatory and pricing differences yet to be settled.

President Trump signed an executive order to implement key aspects of the agreement, including the immediate tariff cuts for cars and aerospace products.

While additional legislative and administrative steps are required to fully operationalize the deal, both governments have expressed confidence in the framework.

Speaking at the summit, President Trump described the deal as “a fair agreement that creates jobs and strengthens our economies.” Prime Minister Starmer called it “a strong signal of cooperation and shared values” between the two nations.

The agreement marks the first major bilateral trade deal of Trump’s second term and the first international policy milestone for the Starmer administration. Observers say the deal underscores the strategic importance of the U.S.–U.K. relationship in a shifting global economic landscape, especially as both countries seek to reinforce supply chains and reduce dependency on geopolitical rivals.

Further negotiations are expected to continue in the coming months as both sides work to finalize unresolved provisions and expand the scope of the agreement.