US tariffs strain G7 trade ties

The U.S. tariff regime is still weighing on relations among Group of Seven allies even after Washington and London struck a sector-by-sector deal last year. A House of Commons Library briefing published on April 14 said the United States has imposed tariffs on most UK goods imported into the U.S. and framed the issue as whether the UK-U.S. Economic Prosperity Deal can mitigate the impact rather than remove it. The briefing said a 10% tariff applies to most other UK goods, while separate arrangements cover steel, aluminum, autos and pharmaceuticals. Reuters reported on May 6 that fresh U.S. tariff threats against European Union-made cars risked straining unity at a G7 trade ministers’ meeting in Paris. ### Which tariffs are still hitting British exports? The House of Commons Library said on April 14 that a 10% tariff applies to most UK goods imported into the United States. The same briefing said President Donald Trump had introduced wide-ranging tariffs since taking office on January 20, 2025, including measures affecting the UK, and that the legal basis for several tariffs changed after a U.S. Supreme Court decision on February 20, 2026. (commonslibrary.parliament.uk) The Library said it remained unclear whether the 10% baseline tariff would be maintained or altered under the new framework. The briefing also said the measures with the strongest effect on UK industry included a 25% tariff imposed on March 12, 2025, on aluminum, steel and derivative goods imports. It said those sector tariffs were partly addressed in later bilateral talks, but not replaced by a return to tariff-free trade across the board. ### What did the UK-U.S. deal actually change? (commonslibrary.parliament.uk) The UK government said on May 8, 2025, that Prime Minister Keir Starmer had secured what it called a “first-of-a-kind” trade agreement with the United States. According to that statement, U.S. tariffs on UK automotive exports were cut from 27.5% to 10% for a quota of 100,000 vehicles, while tariffs on UK steel and aluminum were reduced to zero. (commonslibrary.parliament.uk) A UK government update published on June 20, 2025, said the U.S. would create a 100,000-unit quota for UK car exports at the 10% tariff rate and that the arrangement had been signed by the president through executive order. The same update said the UK would create a preferential duty-free quota for 13,000 metric tonnes of U.S. beef each calendar year and remove the 20% tariff on U.S. beef imports under an existing World Trade Organization quota of 1,000 metric tonnes. (gov.uk) The House of Commons Library said the Economic Prosperity Deal also included the possibility that the current 25% rate on steel, aluminum and derivative goods could be removed if the UK met U.S. supply-chain security requirements. It said pharmaceuticals could enter the U.S. tariff-free in return for UK commitments on domestic pricing policy, and that exemptions for semiconductors and some other goods remained possible. (assets.publishing.service.gov.uk) ### Why is this still a G7 problem if Britain already has a deal? Reuters reported from Paris on May 6 that G7 trade ministers were trying to find common ground on critical minerals while U.S. tariff threats against EU-made cars tested the group’s cohesion. French Trade Minister Nicolas Forissier said implementation of the Turnberry agreement with the EU could be achieved by summer, according to Reuters. (commonslibrary.parliament.uk) The UK case shows the practical limit of the current approach. Britain’s parliamentary briefing describes the bilateral deal as a way to mitigate tariff damage, and the UK government’s own documents set out quotas, carve-outs and staged implementation rather than a broad rollback of U.S. protection. ### What is the economic argument against this approach? (usnews.com) The Express Tribune said in a May 25 opinion column that tariff protection raises the price of imported goods, reduces competition for domestic producers and can encourage rent-seeking rather than productivity gains. The article discussed Pakistan’s auto market, but its argument tracked a wider criticism often made in trade disputes: that consumers absorb part of the cost of protection. (commonslibrary.parliament.uk) The House of Commons Library made a narrower institutional point. Its April 14 briefing said the U.S. tariffs and the responses of trading partners had created a much more uncertain outlook for world trade, prompting the UK government to adopt what it called a pragmatic approach in a more protectionist environment. ### What happens next in the UK-U.S. file? (tribune.com.pk) The UK government said the Economic Prosperity Deal is designed to evolve over time and that only part of its general terms have been implemented so far. The Commons Library directed readers to the government’s deal documents and the April 14 briefing for updates on whether the 10% tariff on most UK goods is maintained, altered or narrowed by future sector exemptions. (commonslibrary.parliament.uk)