G7 summit minus Trump rallies behind Ukraine
KANANASKIS - Group of Seven leaders on Tuesday vowed greater support for Ukraine but stopped short of joint condemnation of Russia for its growing attacks, at a summit missing Donald Trump.
The US president had been due to speak at the G7 summit with his Ukrainian counterpart Volodymyr Zelensky, with whom he has had a volatile relationship, but flew back Monday over the Israel-Iran conflict.
Zelensky met the remaining leaders at a remote lodge in the Canadian Rockies hours after Russia hit Kyiv with one of the worst bombardments since it invaded in February 2022, killing at least 10 people in the capital.
Canadian Prime Minister Mark Carney welcomed Zelensky and announced Can$2 billion ($1.47bn) of military support, including drones and helicopters, for Ukraine.
But the G7 summit stopped short of issuing a joint statement, unlike in past years under Trump's predecessor Joe Biden when the club of major industrial democracies denounced Russian "aggression."
A Canadian official, backtracking on an earlier account of the United States trying to water down a proposed statement, said there was never an attempt to issue one due to Trump's continued hopes of mediating with Russian President Vladimir Putin.
"It was clear that it would not have been feasible to find detailed language that all G7 partners could agree to in that context," the official said on condition of anonymity.
Carney dismissed suggestions of friction, saying that all G7 leaders agreed to be "resolute in exploring all options to maximize pressure on Russia, including financial sanctions."
But he admitted that some G7 leaders "would say above and beyond" what was in the chair's summary he issued instead of a formal statement signed by all leaders.
G7 leaders, however, managed unity Monday on a joint statement on the Iran conflict that backed Israel but also called broadly for de-escalation, despite Trump contemplating greater US military involvement.
US WAITS ON PRESSURE
Carney earlier joined Britain in tightening sanctions on Russia's so-called shadow fleet of ships used to circumvent international sanctions on its oil sales.
"These sanctions strike right at the heart of Putin's war machine, choking off his ability to continue his barbaric war in Ukraine," Prime Minister Keir Starmer said in a statement.
US lawmakers have drafted a package of new sanctions on Russia but Trump has been hesitant to give his support and isolate Putin, to whom he spoke by telephone on the eve of the G7 summit.
Trump infamously berated Zelensky in the Oval Office on February 28, saying he was ungrateful for US aid, but has since voiced disappointment that Putin has rebuffed a US proposal for at least a temporary ceasefire.
Zelensky told Carney the latest Russian attack showed the need for allies' support and pressure on Moscow - while making clear that he still backed Trump-led calls for negotiations.
"It's important for our soldiers to be strong in the battlefield, to stay strong until Russia will be ready for the peace negotiations," said Zelensky, who cut short meetings in Canada scheduled after the summit.
French President Emmanuel Macron accused his Russian counterpart of exploiting global focus on the Middle East to carry out the deadly attack.
"It shows the complete cynicism of President Putin," Macron told reporters at the summit.
In Washington, the State Department also condemned the Russian strikes and offered condolences to the victims' families.
TOUGH TRADE TALKS
The G7 - Britain, Canada, France, Germany, Italy, Japan and the United States - was holding its first summit since the re-election of Trump, who openly questions longstanding US alliances.
Treasury Secretary Scott Bessent remained to represent the United States at the summit, where discussions have also concentrated on Trump's attempts to radically overhaul the world's trading system.
Trump has vowed to slap sweeping tariffs on friends and foes alike on July 9, although he has postponed them once.
The US president, speaking to reporters on his way back from the summit, complained that the European Union was not yet offering a "fair deal" on trade.
"We're either going to make a good deal or they'll just pay whatever we say they will pay," he said.
European Commission President Ursula von der Leyen said she still hoped for a negotiated solution and talks were "intense and demanding."
Trump's negotiators have already sealed a deal with Britain and, outside of the G7, reached an agreement to lower tariffs with rival China.
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G7 summit minus Trump rallies behind Ukraine
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However, prolonged conflict or a blockade of the Strait could drive oil prices significantly higher, threatening global economic stability. 'However, blocking the Strait would prevent their own shipments from getting out and could trigger retaliation from other exporters.' Packirisamy also notes that signs of diplomatic efforts, particularly from the US administration, will be critical to watch, given that a de-escalation in the conflict and a lower risk of spilling over into a broader-based regional conflict are necessary for market normalisation. ALSO READ: Policy Uncertainty Index drops sharply due to various local and global risks Volatile oil prices due to Israel-Iran conflict George Brown, senior economist at Schroders, also notes that oil prices are volatile as the conflict continues. He says similar incidents in recent years amounted to a limited exchange, with Iran's response typically sufficient to demonstrate domestic strength without escalating tensions further. 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'If Brent Crude settled at $75 per barrel, it would imply that G7 energy inflation would be a little above 5% over the next year.' Would this lead to broader inflationary pressure? Brown says probably not. 'Our previous research on the relationship between oil prices and inflation suggests that every 10% rise in oil prices adds just 0.1% to core inflation.' ALSO READ: Trump's ultimatum undermines US credibility If US joins, Israel-Iran conflict could push oil price higher Bianca Botes, director at Citadel Global, warns that tensions are rising in the Middle East, with speculation mounting that the US could soon join the ongoing conflict. 'High-level security meetings and strong public statements have added to the sense of urgency, while both Israel and Iran appear determined to escalate the conflict after several days of hostilities.' She says these developments pushed oil prices higher, as markets brace for the possibility of a broader confrontation. 'Asian stocks have been mixed, while Wall Street closed in the red. Investors are also cautious ahead of a key monetary policy decision from the Fed today. 'Expectations are that rates will remain unchanged, but it is the forward guidance that will play a critical role in market dynamics. The dollar has softened, and emerging market assets are under pressure as traders weigh both geopolitical risks and uncertainty over future US interest rate moves. 'Risk appetite remains subdued as global markets await further clarity.' The rand is under pressure amid risk-off sentiment, trading at R17.98/$, R20.68/€ and R24.17/£, Botes says.
