US & UK Strike Partial Trade Deal at G7, Steel Tariffs Remain in Limbo

U.S. President Donald Trump and UK Prime Minister Keir Starmer announced a limited trade agreement at the G7 Summit on Monday, securing immediate benefits for key British industries while leaving contentious steel tariffs unresolved.

The deal, signed by Trump in Canada, delivers concrete wins:

• Autos: Reaffirms a 100,000-vehicle annual quota for UK car exports to the US at a preferential 10% tariff (vs. standard 25%)
• Aerospace: Eliminates all US tariffs on UK aerospace products (including parts and planes)
• Beef: Grants reciprocal access for 13,000 metric tons of US beef, contingent on meeting UK food safety standards

The Steel Sticking Point:
Despite the progress, US steel and aluminum tariffs remain a major unresolved issue:

• The US intends to grant a tariff-exempt quota for UK steel/aluminum imports, but this is contingent on the UK demonstrating security in its steel supply chains and production facilities.
• The specific quota level will be set later by Commerce Secretary Howard Lutnick.
• This conditional arrangement means the UK has dodged the 50% steel tariffs imposed on other countries earlier in June, avoiding an automatic increase scheduled for July 9th. However, final relief remains uncertain pending UK compliance with undefined security requirements.

Broader Context & Next Steps:

• Starmer hailed the deal as “a very good day” and “a real sign of strength,” noting the UK is the only country to secure such preferential terms from Trump.
• UK Trade Secretary Jonathan Reynolds emphasized speed: “Bringing trade deals into force can take several months, yet we are delivering… in a matter of weeks. And we won’t stop there.”
• Pharmaceuticals: A critical sector for the UK, pharmaceuticals were notably absent from the agreement. Reynolds stated both sides remain focused on securing “significantly preferential outcomes” for this industry.
• Ongoing Concerns: Work continues to shield UK industries from potential future Section 232 tariffs under US investigation.
• Trump’s Quip: When asked if the deal fully protects the UK from future tariffs, Trump replied: “The UK is very well protected. You know why? Because I like them. That’s their ultimate protection.”