What’s in the U.S.-U.K. trade deal and what does it mean for Canada?

U.S. President Donald Trump, right, speaks with U.K. Prime Minister Keir Starmer during a joint press conference in the East Room at the White House on Feb. 27, 2025 in Washington, D.C. Photo by Andrew Harnik/Getty Images files

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The United States and United Kingdom announced a trade deal Thursday, the first significant pact since U.S. President Donald Trump unleashed his so-called “Liberation Day” tariffs on April 2. Those tariffs, which applied to more than 50 countries and reached eye-watering levels nearing 50 per cent in some cases, were paused until July, with the U.S. administration claiming that countries were rushing to make make deals to avert a full-on trade war. Here’s what you need to know about the agreement with the U.K. and what it could mean for Canada’s own negotiations with the U.S.

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What’s in the deal?

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The deal includes some relief on recent tariffs for the United Kingdom, including on steel and aluminum, though details were not immediately released. There is also a tariff-rate quota on automobiles, allowing for 100,000 autos to be exported to the U.S. at a reduced tariff rate of 10 per cent, lower than the 25 per cent initially imposed by the U.S. on all foreign made cars. In exchange, the U.K. will open its market to U.S. agricultural products including beef and produce, as well as ethanol. Trump said this represents a “$5 billion opportunity” for the United States. It was expected that the U.K. would have to make concessions on its digital services tax, but that was not mentioned by either side in the announcement. “We wouldn’t rule it out yet with negotiations still ongoing,” economists at Toronto-Dominion Bank said in a note Thursday. Trump said there was also a special carve-out for Rolls-Royce Holdings PLC, allowing airport engines to be exported to Boeing tariff-free — while the U.K would later announce a commitment to buy $10 billion worth of Boeing planes. He also said that the U.K. will be joining the U.S. in taking steps to counter “dumping” of steel and aluminum to bolster the industry.

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How significant is the deal?

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While Trump boasted that the deal is full and “comprehensive,” it covers only limited sectors and reduces some tariffs, while adding some access for the U.S. and U.K to each other’s markets. The announcement is expected to be followed by months of work to hammer out further details and paper the deal. “It’s more symbolic than economic,” according to the TD economists, led by chief economist Beata Caranci, who wrote that the agreement is actually a 12-month pact, which is to be followed by a larger agreement still to be negotiated. U.K. Prime Minister Keir Starmer joined Trump’s news conference in the Oval Office remotely and hailed it as a “really fantastic historic day,” adding that the timing of the trade agreement announcement coincided with the end of the Second World War in Europe 80 years ago. However, Peter Mandelson, the U.K. ambassador to the United States, who was in the Oval Office, referred to the trade deal as a beginning. “There is yet more we can do in reducing tariffs and trade barriers so as to open up our markets to each other, even more than we’re agreeing to do today, but it also provides us with the platform,” he said. The trade announcements are not comprehensive, said William Pellerin, a partner in the international trade group at McMillan LLP. “Although the agreement may benefit both (countries) … relief will be sectoral and address a few irritants,” he said “Any broad or comprehensive agreement would require approval by the U.S. Congress, and that may not yet be in the cards.”