By Jarrett Renshaw and Andrea Shalal

KANANASKIS, Alberta (Reuters) -U.S. President Donald Trump signed an agreement on Monday formally lowering some tariffs on imports from Britain as the countries continue working toward a formal trade deal.

The deal, announced by Trump and British Prime Minister Keir Starmer on the sidelines of the G7 Summit in Canada, reaffirmed quotas and tariff rates on British automobiles and eliminated tariffs on the U.K. aerospace sector, but the issue of steel and aluminum remains unresolved.

Other critical industries, such as pharmaceuticals, were not mentioned.

Trump said the relationship with Britain was "fantastic," as he waved, and then briefly dropped, a document that he said he had just signed.

"We signed it and it's done," he said, incorrectly calling it a trade agreement with the European Union, before making clear the deal was with Britain.

Starmer called it "a very good day for both of our countries, a real sign of strength"

The U.S. intends to impose a quota on steel and aluminum imports from the United Kingdom that would be exempt from 25% tariffs, but it is conditioned upon Britain's demonstrating security on steel supply chains and production facilities, according to an executive order released by the White House.

The quota level will be set by Commerce Secretary Howard Lutnick, the White House said.

Britain had avoided tariffs of up to 50% on steel and aluminum that the U.S. imposed on other countries earlier this month, but it could have faced elevated tariffs starting July 9 unless a deal to implement the tariff reduction was reached.

The two leaders reaffirmed a plan to give British carmakers an annual quota of 100,000 cars that can be sent to the United States at a 10% tariff rate, less than the 25% rates other countries face.

The plan will go in effect seven days after it is published in the Federal Register, the White House said.

The agreement also eliminates tariffs on the UK aerospace industry, including parts and planes, according to the executive order.

Britain was the first country to agree on a deal for lower tariffs from Trump, with the U.S. reducing tariffs on imports of UK cars, aluminum and steel, and Britain agreeing to lower tariffs on U.S. beef and ethanol.

But implementation of the deal has been delayed while details were being hammered out and some issues remain outstanding.

Britain called the deal a huge win for its aerospace and auto sectors, noting the UK was the only country to have secured such a deal with Washington.

“Bringing trade deals into force can take several months, yet we are delivering on the first set of agreements in a matter of weeks. And we won’t stop there," UK Trade Secretary Jonathan Reynolds said in a statement.

Reynolds said the two sides agreed to reciprocal access to 13,000 metric tons of beef, while making clear that U.S. imports would need to meet tough UK food safety standards.

He said both countries remain focused on securing "significantly preferential outcomes" for the UK pharmaceutical sector, and work would continue to protect industry from any further tariffs imposed as part of Section 232 investigations underway by the U.S. Commerce Department.

Asked if the deal protects the United Kingdom from future tariff threats, Trump responded: “The UK is very well protected. You know why? Because I like them. That's their ultimate protection.”

(Reporting by Jarrett Renshaw, Suzanne Plunkett and Andrea Shalal, Writing by Sachin Ravikumar and Alistair Smout; Editing by Kate Holton, Deepa Babington, Rod Nickel and Leslie Adler)