June 15, 2025
The UK will seek to restart trade negotiations with Canada, Prime Minister Keir Starmer said, as he strives to strengthen commercial ties around the world to better insulate Britain’s economy from the fallout of US President Donald Trump’s tariff war.
“The world is changing on trade and the economy,” Starmer told reporters on Saturday on his way to meet Canadian Prime Minister Mark Carney. “That means we need to do more securing our base at home and turbo-charging what we are doing on the cost of living and at the same time reducing trade barriers with other countries.”
Starmer and Carney agreed to establish a new working group to “deepen our existing trading relationship,” with a deadline to report back in six months, according to a joint statement by the leaders Sunday. The group will be asked to deal with market access questions, and explore ways to cooperate on critical minerals and artificial intelligence.
While the two nations reached a trade continuity deal in the wake of the UK’s departure from the European Union, talks for a bespoke deal to cover bilateral trade worth an annual £27.5 billion ($37 billion) stalled last year after a dispute over beef, when neither Starmer nor Carney was yet in office.
Both nations are also members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, known as CPTPP. Carney agreed his government will aim to introduce legislation this year to ratify the UK’s accession into that trade deal — a move that would lower tariffs between the countries.
Starmer will use the G-7 summit to argue that in a shifting global economy, the UK must retain its proud status as a free and open trading nation by strengthening existing alliances while reducing barriers to trade with other countries, his office said.
A trade deal with Canada was not listed as a priority for the UK government last year, when Trade Minister Douglas Alexander named agreements with the Gulf Cooperation Council, India, Israel, the Republic of Korea, Switzerland, and Turkey as the areas his department was focusing on. But Trump’s return to the White House and his ratcheting up of tariffs against countries around the world has forced UK negotiators to recalibrate — seeking exemptions from the US levies while also casting a wider net in their search for new deals.
Canada was the 13th biggest destination for UK exports in 2024, taking in £16.9 billion of British goods and services, according to UK statistics. It was the 17th biggest source of imports into Britain, with goods and services worth £10.6 billion crossing the Atlantic.
Since Starmer took office last July, his Labour government has struck a free trade deal with India and also smaller deals with the US and EU on trade and defense.
Under the US deal, which has yet to be implemented, the Americans would scrap tariffs on steel and aluminum imports from the UK and cut levies on cars to 10% from 27.5%. Starmer said in an interview with Bloomberg News on Friday that he’s “hoping that we will complete it pretty soon,” and that there are no “hiccups or obstacles.”
The premier is trying to strike a delicate balance between his friendly relationship with Trump — the UK is the only country so far to agree to a slimmed-down trade agreement amid his threats of tariffs — while also standing up for British allies with whom Trump has been more confrontational.
When asked for a response on Trump’s continued threats to make Canada a 51st state of the US, Starmer said he was “absolutely clear” that Canada is “an independent, sovereign country and a much-valued member of the Commonwealth” — his strongest public defense of the country yet.
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