G7 Skirts Tariff Tensions, Focuses on Imbalances \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ The G7 finance leaders sidestepped disputes over U.S. tariffs, instead uniting to address global trade “imbalances,” widely seen as criticism of China. The final communiqué omitted previous commitments to free trade and climate action while softening rhetoric on Russia. Tensions over U.S. trade policy remain unresolved ahead of the June G7 leaders’ summit.
Quick Looks
- Tariffs Avoided: G7 sidesteps direct clash over Trump’s tariff policies.
- China Targeted: Vague “nonmarket practices” reference criticized Chinese trade strategies.
- Russia Sanctions: Group left door open for further sanctions if no ceasefire.
- Softened Language: Ukraine section toned down from prior strong condemnations.
- U.S. Influence: Treasury Secretary Bessent swayed communiqué toward Trump’s stance.
- Missing Topics: Climate change, tax cooperation, and U.S. budget deficits omitted.
- Summit Prep: Sets stage for June 15–17 leaders’ summit in Canada.
Deep Look
Top financial officials from the Group of Seven (G7) advanced economies concluded two days of talks with a watered-down communiqué that set aside disputes over U.S. trade tariffs and instead focused on countering global “economic imbalances”—a thinly veiled reference to China’s trade policies.
Meeting in the scenic Canadian Rockies, finance ministers and central bank governors from the U.S., Canada, United Kingdom, Japan, Germany, France, and Italy agreed to monitor “nonmarket policies and practices” that distort global trade. While China was not named directly, the language clearly pointed to practices like export subsidies and currency manipulation that the Trump administration has long accused Beijing of using to gain unfair advantages.
U.S. Treasury Secretary Scott Bessent played a key role in shaping the communiqué to reflect the Trump administration’s views, particularly on trade. The document notably omitted the G7’s usual affirmations of free trade, dropped previous references to international tax coordination, and excluded any mention of climate change—a sign of shifting priorities under Trump’s economic leadership.
While the tone of the summit was more conciliatory than the G7 foreign ministers’ meeting in March—held amid Trump’s aggressive tariff threats—the final statement masked significant divisions. Canada’s Finance Minister Francois-Philippe Champagne acknowledged tensions but emphasized the group’s decision to focus on “restoring global growth and stability.”
Trump’s tariff policies loomed large in the background. The administration has imposed a sweeping 10% tariff on global imports and additional duties on steel, aluminum, vehicles, and goods from over 60 nations. Though the tariffs were not explicitly discussed in the communiqué, they remained a point of contention among participants.
European Union Trade Commissioner Valdis Dombrovskis confirmed that tariff policy was a “difficult topic,” and while the EU pushed for stronger language highlighting the economic harm caused by tariffs, these proposals were sidelined. Dombrovskis added that detailed talks on tariffs were taking place in bilateral negotiations with Washington, rather than at the G7 table.
On Ukraine, the group reaffirmed its opposition to Russia’s ongoing war but used milder language than in 2023. Instead of labeling the invasion as “unprovoked and illegal,” as in past years, the statement simply condemned Russia’s “continued brutal war.” This shift reflects ongoing Trump administration efforts to avoid inflaming tensions with Moscow while promoting peace negotiations.
However, Canada’s Champagne broke with the softened tone, calling the invasion “illegal” during the summit’s closing press conference. The G7 also agreed that no nation or entity supporting Russia’s war—implicitly referencing China—should benefit from Ukraine’s reconstruction. This clause was seen as a strategic move by Bessent to restrict Chinese involvement post-war.
Despite the relatively muted messaging, the communiqué reaffirmed the G7’s commitment to freezing Russian assets and potentially using them to fund Ukraine’s rebuilding. The EU, meanwhile, pushed—unsuccessfully—for a lower price cap on Russian oil, proposing a drop from $60 to $50 per barrel.
Critics were quick to label the document as lacking substance. Mark Sobel, former Treasury official and current senior adviser at the Center for Strategic and International Studies, described the statement as “feeble,” pointing out its failure to directly address U.S. tariffs or budget deficits. “This risible communiqué cannot hide the fissures in the G7,” Sobel said, warning of deeper divisions ahead of the leaders’ summit in June.
John Kirton, director of the G7 Research Group at the University of Toronto, noted that the mere issuance of a communiqué was an achievement, given the tense atmosphere. However, he questioned the group’s assertion that “economic policy uncertainty has declined,” citing ongoing U.S. legislative debates and market turbulence as evidence to the contrary.
Indeed, U.S. markets have reacted nervously to a pending tax and spending package, which has pushed up interest rates on Treasury securities and raised doubts about economic stability.
On the sidelines of the G7, Bessent held bilateral talks with Champagne and Japan’s Finance Minister Katsunobu Kato. The two discussed trade and currencies, with both sides reaffirming that exchange rates should remain market-driven. Notably, there was no discussion of foreign exchange levels—a sign that the U.S. is not currently pressuring Japan over the yen’s value, despite past criticisms.
With Canada serving as this year’s G7 president, the finance summit was designed to lay the groundwork for the heads-of-state meeting from June 15–17 in Kananaskis, Canada. The White House confirmed that President Trump will attend.
As the group prepares for that high-stakes summit, the finance ministers’ restrained communiqué may have preserved short-term unity but exposed deeper fault lines that will likely resurface among world leaders next month.
G7 Skirts Tariff G7 Skirts Tariff
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