G7 glosses over tariffs, pledges to cut global economic imbalances

Business Recorder

23-05-2025

BANFF: Finance ministers and central bank governors from the Group of Seven democracies papered over their differences on Thursday, pledging to address 'excessive imbalances' in the global economy and saying they could increase sanctions on Russia.
Ahead of the meeting there had been doubt about whether there would be a final communique, given divisions over U.S. tariffs and Washington's reluctance to refer to Russia's war on Ukraine as illegal.
But after talks that stretched over three days, participants signed on to a lengthy document that was devoid of previous language on fighting climate change and had softened references to the Ukraine war.
'We found common ground on the most pressing global issues that we face,' Canadian Finance Minister Francois-Philippe Champagne told the closing press conference.
'I think it sends a very clear signal to the world … that the G7 is united in purpose and in action.'
The finance ministers and central bank governors, who met in the Canadian Rocky Mountains, said there was a need for a common understanding of how 'non-market policies and practices' undermine international economic security.
The document did not name China, but references by the U.S. and other G7 economies to non-market policies and practices often are targeted at China's state subsidies and export-driven economic model.
The G7 statement also did not mention the tariffs imposed by U.S. President Donald Trump that are disrupting global trade and supply chains and adding economic uncertainty.
Champagne downplayed the lack of communique language on tariffs, but said ministers 'were not skating around' the issue and discussed their impacts during the meeting.
Canada is seeking a deal to eliminate Trump's 25% tariffs on many goods, including steel and aluminum.
'We're trying to enhance growth and stability. And obviously tariffs are something in that context that you can't avoid discussing,'
The finance meeting sets the stage for a G7 leaders summit June 15-17 in the nearby mountain resort area of Kananaskis. Trump will attend the summit, the White House confirmed on Thursday.
The G7 communique called for an analysis of market concentration and international supply chain resilience.
'We agree on the importance of a level playing field and taking a broadly coordinated approach to address the harm caused by those who do not abide by the same rules and lack transparency,' it said.
The communique also recognized an increase in low-value international 'de minimis' package shipments that can overwhelm customs and tax collection systems and be used for smuggling drugs and other illicit goods.
The duty-free de minimis exemption for packages valued below $800 has been exploited by Chinese e-commerce companies including Shein and Temu . The Chinese embassy in Ottawa said it could not immediately comment on the G7 statement.
'Brutal' but not 'illegal' war
The G7 finance chiefs condemned what they called Russia's 'continued brutal war' against Ukraine and said that if efforts to achieve a ceasefire failed, they would explore all possible options, including 'further ramping up sanctions.'
The description of the Ukraine war was watered down from the prior G7 statement, opens new tab issued in October, before Trump's re-election, calling it an 'illegal, unjustifiable, and unprovoked war of aggression against Ukraine.'
G7 finance leaders try to downplay tariff disputes, find consensus
Trump has diminished U.S. support for Ukraine and has made statements suggesting that Kyiv was to blame for the conflict as he tries to coax Russia into peace talks.
But the G7 ministers pledged to work together to ensure no countries that financed the Russian war would be eligible to benefit from the reconstruction of Ukraine.
'That's a very big statement,' said Champagne, calling it a fundamental pillar of the communique. It did not name China or other countries that the West has accused of supplying critical components to Russia in defiance of sanctions.
Russia's sovereign assets in G7 jurisdictions would remain immobilized until Moscow ended the war and paid for the damage it has caused to Ukraine, the communique said.
European Commission Executive Vice President Valdis Dombrovskis said the G7 ministers discussed a proposal to lower the G7-led $60-per-barrel price cap on Russian oil exports, given Russian crude is now selling under that level.
But the plan was not mentioned in the communique, partly because U.S. Treasury Secretary Scott Bessent was not convinced that it was needed, a European official said. Brent crude currently trades around $64 per barrel.
A European official said the United States is 'not convinced' about lowering the Russian oil price cap.
A U.S. Treasury official did not immediately respond to a request for comment.
Bessent's low profile
Bessent came to Banff to the relief of many participants after he skipped a G20 finance meeting in Cape Town, South Africa in February.
G7 officials described his interactions as 'constructive' and 'flexible' and said some initial stiffness later gave way to jokes over dinner.
'We had a feeling that it was a discussion between friends and allies,' a French official said.
But Bessent took an unusually low profile for a U.S. Treasury secretary at the G7 meetings, staging no news conference and largely operating out of sight of the press.
'I had a very productive day,' he said to a reporter on Wednesday in his only public comment to media at the meeting.