Announced alongside British Prime Minister Keir Starmer at the G7 Summit, the deal sets quotas and reduces tariffs on British car exports, and eliminates duties on aerospace goods—though issues over steel and aluminum remain unresolved. Trump called the U.K. relationship “fantastic,” while Starmer said it was “a very good day for both of our countries.”

The U.S. plans to establish quotas exempt from the 25% tariff on British steel and aluminum, pending security guarantees. Without the agreement, the U.K. would have faced steep tariffs by July 9. The deal allows British automakers to export 100,000 cars annually to the U.S. at a 10% tariff, down from 25%. In exchange, the U.K. will lower tariffs on U.S. beef and ethanol. The agreement takes effect seven days after publication in the Federal Register.

Separately, Trump is considering expanding travel restrictions to citizens of 36 additional countries, according to a State Department cable obtained by Reuters. This would follow a prior executive order affecting 12 nations and mark one of the largest visa overhauls in U.S. history. The internal cable, signed by Secretary of State Marco Rubio, gives these countries 60 days to meet U.S. standards on identity verification and security. Failure to comply could lead to full or partial entry bans. Countries under review include Angola, Benin, Burkina Faso, Cameroon, Egypt, Nigeria, Tanzania, Cambodia, Tonga, and Saint Lucia, evaluated based on passport security, deportation cooperation, and terrorism-related risks.

The yield on the 10-year U.S. Treasury held near 4.43% on Tuesday, stabilizing after two days of gains, as markets awaited the upcoming Federal Reserve decision. While the Fed is widely expected to keep rates unchanged, investors are watching closely for forward guidance. Hopes for rate cuts have faded due to trade-related uncertainty and inflation pressure, especially from rising oil prices. U.S. retail sales data due later today may offer insight into consumer strength and economic momentum.

Geopolitical tensions remain in focus, with Trump calling for the full evacuation of Tehran with ongoing Israeli strikes and reiterating that Iran should have accepted his proposed nuclear deal. He left the G7 summit in Canada early to monitor developments in the Middle East.

In Japan, the 10-year government bond yield rose above 1.45% on Tuesday, marking a second straight day of gains after the Bank of Japan held its policy rate steady at 0.5%, as expected. The central bank maintained its bond tapering plan through March 2026 but signaled openness to adjustments if necessary. Policymakers remain cautious with rising oil prices and U.S. trade policy uncertainty.

On the G7 sidelines, Prime Minister Shigeru Ishiba and Trump met for 30 minutes but failed to resolve key trade issues. Japan had hoped to avoid 25% tariffs on car exports and 24% on other goods, currently paused until July 9. “We’ve explored the possibility of a deal down to the wire, but differences remain,” Ishiba said, stressing Japan’s auto sector as a “major national interest.” The two leaders agreed to continue talks in the coming weeks.

Check out today's analysis below for more insights.