Trump signs US–UK trade deal at G7, says Britain ‘protected because I like them’

US President Donald Trump and UK Prime Minister Keir Starmer have signed off on a long-awaited trade agreement covering aerospace and automobiles but left the future of British steel exports unresolved.

The deal was inked on the sidelines of the G7 summit in the Canadian Rockies on Monday. It marks the first bilateral trade pact under Trump’s second term, a pact both leaders hailed as a “sign of strength.”

But beyond the smiles and handshakes, the agreement falls short of finality. While Trump declared, “We just signed it, and it’s done,” critical sectors like steel and pharmaceuticals remain mired in negotiations.

Aerospace and autos win big

Under the agreement, the UK aerospace sector will now face zero tariffs from the United States. This is a major victory for British manufacturers like Rolls-Royce, who were facing a proposed 10 per cent levy on exports.

The UK auto industry also benefits. Tariffs on British-made cars will drop from 27.5 per cent to 10 per cent, but only for up to 100,000 vehicles per year. Exports above this quota will still be subject to steep US tariffs, as per the UK’s Department for Business and Trade, quoted by Associated Press.

“This is a real sign of strength,” Starmer told reporters. “It’s a good day for both our countries.”

President Trump praised the agreement too, saying, “The UK is very well protected… because I like them,” as reported by Reuters.

Steel industry in limbo

The most contentious issue, tariffs on British steel and aluminium remains unresolved. Trump had earlier threatened to raise global tariffs to 50 per cent but has kept UK rates at 25 per cent for now.

The British government maintains that the plan is still for “0 per cent tariffs on core steel products as agreed,” but Trump’s executive order, issued Monday, introduced uncertainty.

The US Commerce Department will now determine the volume of UK steel eligible for tariff-free access. A key sticking point is US concern over Chinese ownership of UK plants—specifically the Jingye Group’s stake in British Steel, as reported by Reuters.

The UK had taken control of British Steel in April to prevent a shutdown of the Scunthorpe facility, but Washington still wants assurances that Chinese entities are not using the UK as a backdoor to evade US tariffs.

Trump’s confusion, Starmer’s relief

In a chaotic moment at the summit, Trump mistakenly said the trade agreement was with the European Union, not the UK. “We have our trade agreement with the European Union,” he told reporters, before quickly correcting himself. The slip-up did little to dampen the UK’s sense of diplomatic achievement.

For Downing Street, the finalisation of even a partial deal counts as a symbolic win, especially on the global stage. The aerospace sector, one of Britain’s highest-value export industries, now enjoys tariff-free access to the US market.

“This deal protects jobs and livelihoods in some of our most vital sectors,” UK Trade Secretary Jonathan Reynolds said. Mike Hawes, CEO of the Society of Motor Manufacturers and Traders, called it “great news” for the auto sector.

What’s in the deal?

The agreement removes all US tariffs on UK aerospace exports and imposes a 10 per cent cap on up to 100,000 British car exports annually. It also allows 13,000 metric tonnes of beef to be traded between both countries each year, though the UK will maintain its ban on hormone-treated US beef. Other areas, including steel, aluminium, digital services, and pharmaceuticals, remain under negotiation.

The US administration also stressed that any future tariff exemptions will depend on security assurances and transparent ownership across UK supply chains, particularly in sensitive sectors like metals and healthcare.

Monday’s signing was less a breakthrough and more a checkpoint. The framework first announced in May had left British businesses uncertain, especially after Trump doubled global metals tariffs earlier this month. The UK was spared that hike, but the reprieve may be temporary.

While aerospace and auto manufacturers now have clarity, steel producers remain in limbo. And with Trump’s nationalist rhetoric intensifying ahead of the November election, the durability of this deal is far from guaranteed.

More rounds of negotiation are expected in the weeks ahead, but for now, Trump’s personal diplomacy and Starmer’s soft-spoken strategy have delivered a limited, but politically symbolic win.

(With inputs from the agencies)