Some liquid surrounds English ship (7)
I believe the answer is:
galleon
'ship' is the definition.
(type of ship)
'some liquid surrounds english' is the wordplay.
'some liquid' becomes 'gallon' (gallon is a unit of liquid).
'surrounds' indicates putting letters inside.
'english' becomes 'e' (abbreviation).
'gallon' going around 'e' is 'GALLEON'.
(Other definitions for galleon that I've seen before include "Spanish treasure ship" , "Historical warship with three or more masts" , "All gone (anag.)" , "Large Spanish sailing ship of yore" , "Ship of the line" .)