Britain and the United States have formally signed a partial bilateral trade agreement during the G7 summit in Canada, according to a press release issued by the UK government on Tuesday.
The agreement, first announced in May, includes tariff reductions on British car and aerospace exports, but several key sectors, notably steel, aluminium, and pharmaceuticals, remain unresolved.
The deal came into effect after U.S. President Donald Trump signed an executive order to implement it. British Prime Minister Keir Starmer, who met with Trump at the summit, confirmed that the core tariff reduction measures would take effect “immediately.”
Under the agreement, the U.S. will reduce tariffs on up to 100,000 British-made cars per year from 27.5 percent to 10 percent. It also removes the 10 percent U.S. tariff on British aerospace products, including jet engines and aircraft components, a measure expected to take effect by the end of the month.
Britain has also agreed to a quota of 1.4 billion litres of tariff-free U.S. bioethanol imports, a volume roughly equivalent to the country’s total annual domestic demand. In return, the U.S. has committed to allowing limited British beef exports.
The British government said all American agricultural imports would still need to meet Britain’s food safety and animal welfare standards. However, British bioethanol producers and farming groups have expressed concern that the influx of U.S. products could undercut local industries.
Despite these developments, large parts of the agreement remain incomplete. According to reports by the Financial Times, both sides are still in negotiations over steel and aluminium tariffs.
Although Britain currently benefits from an exemption to the new 50 percent global steel duty announced by Trump, it continues to face a 25 percent tariff.
British officials said that final arrangements have been delayed due to “technical and legal” challenges, including U.S. rules requiring that steel must be “melted and poured” in its country of origin. Much of Britain’s steel is processed from imported material and may not qualify under that definition.
Pharmaceuticals represent another unresolved area. While the British government says both sides aim to secure “significantly preferential outcomes” for the British pharmaceutical industry, no binding provisions have been announced.
According to British media, Starmer has appointed his senior business adviser Varun Chandra to lead a delegation to Washington this week. The team, which includes embassy trade officials, is expected to focus on finalising the remaining elements of the agreement.
Industry analysts and trade experts have pointed out that the deal is limited in scope and relies on executive action rather than formal legislation. This raises questions about the long-term stability of the agreement, particularly if there is a change in U.S. leadership.
