English city councillor with yarn about American (8)
I believe the answer is:
carlisle
'english city' is the definition.
(I've seen this before)
'councillor with yarn about american' is the wordplay.
'councillor' becomes 'cr' (I've seen this in other clues).
'with' says to put letters next to each other.
'yarn' becomes 'lisle' (lisle is a kind of yarn**).
'about' is an insertion indicator.
'american' becomes 'a' (common abbreviation - e.g. in organisation names).
'cr'+'lisle'='crlisle'
'crlisle' enclosing 'a' is 'CARLISLE'.
(Other definitions for carlisle that I've seen before include "See" , "Administrative centre of Cumbria" , "Cellars I turn to in Northern English city" , "City in Cumbria" , "Cumbrian city where Royalists surrendered in 1645" .)